AfricaPress-Tanzania: THE Bank of Tanzania (BoT) has been raking up more sum than offered on government securities sales since end of March, a move seems to relax treasury yields.
The central bank trend, according to debt market analysts, is expected to push Wednesday’s T-bill yield up, albeit slight.
Zan Securities Chief Executive Officer (CEO), Raphael Masumbuko said owing to what happened in the last sale of 2 0 years government bond they expecting yield rate for Wednesday T-bill sale to slight go up.
“We expect a slight increase in yield in [ this] week auction for Treasury Bills owing to what happened in this week’s auction for the Treasury bond,”
Mr Ma- sumbuko said in Zan’s Weekly Market Wrap-ups. Last Wednes- day, BoT offered a 2 0-year T- bond worth the usual 117 bn/-but investors tendered 2 3 0.6 bn/-.
The 2 0-year bond tender size was 16 .7 percent lower than amount from the previous bond auction held last month.
The amount accepted by the BoT went up to 2 00.7 bn/- compared to 17 0bn/-during the previous auction.
Orbit Securities said yester- day despite a slowdown in the public’s appetite, the sum raised by the government rose by 18 per cent for the most profitable government security.
“Despite the [ BoT] rais- ing the successful amount, the weighted average yield to maturity marginally lost 6 bps to 15.7 8 8 6 percent,” Orbit said in its Weekly Market Synopsis report.
Analysts have it that amid this coronavirus pandemic, the government securities are con- sidered as a safe investment compared to stocks.
Dar es Salaam Stock Exchange (DSE), according to Orbit Securities, “is still in a distasteful shape”, with turnovers at lowest point in the market’s recent history.
The daily average turnover since the beginning of May amounts to 3 .7 5m/-compared to 2 .1bn/-for January and February.
Tanzania Securities, how- ever, said in their Weekly Mar- ket Blast the treasury securities yield curve may continue to re- main normal. “[ While] … weighted aver- age yields are expected to decline, this indicates low funding cost by the government” Tanzania Securities said.
However, the firm, projected oversubscription of the treasury bill due to the higher appetite for government securities.
