Low yield rates lower investors’ appetite

According to the Bank of Tanzania (BoT) auction summary the short term government note performed poorly, fetching bids worth 45.5bn/- compared to 170bn/- offered to the market.

Market analysts said the poor performance of the treasury bills signify that investors are shifting focus to highly paying opportunities from government papers. This happened after almost nine months of outstanding performances due to falling yield rates.

The investment opportunities with high return that investors may have shifted the focus are equity and corporate bonds. However, apart from the undersubscription, the government retained only 45.5bn/-as successful amount.

The BoT uses the short-term government note to mop excess liquidity in the circulation. Interest rates on the 364 tenure declined to 4.12 per cent from 4.38 per cent and 5.09 per cent of the previous sessions.

Yield rate on 182 days tenure declined to 2.67 per cent from 2.96 per cent and 3.16 per cent preceding sessions.

Weighted average yield declined to 3.38 per cent on the session held on Wednesday compared to 4.16 per cent held two weeks ago. Weighted average price for successful bid increased to 96.05 from 95.81 and 93.92 per cent the last sessions.

The 364 days tenure attracted bids worth 22.3bn/-compared to 100bn/- offered to the market and at the end 22.3bn/- was retained as successful amount.

Source: Daily News

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