AfricaPress-Tanzania: THE oversubscription greeted the Treasury bills instrument auctioned last week, which is a sign of high investors’ appetite and improved liquidity in the market.
The short term instrument auctioned by the Bank of Tanzania (BoT) was significantly oversubscribed by almost 60 per cent.
“The BoT seems to have relaxed the push back on lowering yields after accepting more than what it offered to the market,” said Orbit Securities Company Limited in its weekly market synopsis.
The Central bank offered Treasury bills valued at 107.2bn/- but the total amount tendered in the market jumped to 170.33bn/-.
The Bank accepted 155.8bn/- as successful amount which according to the analyst is 45 per cent above the offer size.
The only undersubscription tenor was the 91 days while all the other remaining tenors were oversubscribed by over 50 per cent.
A total of 1bn/- bids was fetched compared to 1.7bn/- that the bank wanted to raise through the 91 days tenor.
The 35 days offered attracted bids worth 2bn/- above the offer size of 1bn/-.
The two, 35 and 91 days offer are used to mop out excessive liquidity in the market while funds raised through the 364 and 182 days offers are used to finance budget.
The 364 days offer attracted bids valued at 150.83bn/- compared to 101bn/-, the offer size placed in the market.
The 182 days offer fetched 16.5bn/- compared to 3bn/- offered for tendering.
During the trading session, the short term maturities received a total of 97 bids but 87 emerged successful.
The total weighted average yield to maturity (WAYTM) slightly increased for the first time since mid-January.
The WAYTM gained 11bps to 4.94 per cent compared to 4.83% during the previous auction.
Key investors in the treasury bills are commercial banks, pension funds, insurance companies, some microfinance institutions and retail investors.
On the secondary market, the government transacted 18.3bn/- with face value of 17.87bn/- from last week’s transaction value and face value of 14.99bn/-and 14.98bn/-, respectively.
The corporate bond segment transacted 2.94m/- with face value of 3.0m/-.
