Investor demand for T-bills increases as tight liquidity eases

The overnights rates are still at 14 per cent to 16 per cent levels. In the short term government paper auctioned by the Bank of Tanzania (BoT) last week shows that total bids of 141.62bn/- were tendered compared to 138bn/- offered to the market for bidding and at the 116.31bn/-became successful amount.

Yield rates declined slightly across all tenures but did not affect the performance of the short term government note to attract more bids, the situation implying the easing liquidity squeeze in the market. The two tenures 364 and 182 days contributed about 99 per cent of the total bids while 91 and 35 shared less than one per cent.

The 364 and 182 days offer attracted bids worth 84.42bn/- and 57.04bn/- respectively against 80bn/-and 50bn/- offered to the market for bidding while the 91 days and 35 days offer attracted 51.49m/- and 101.90m/- respectively.

Yield rates for the 364 and 182 days offer was 15.86 per cent as in the previous session and 15.49 per cent compared to 15.68 per cent and of the previous session held two weeks ago. The 91 days tenure interest rate was 7.50 compared to 7.46 per cent of the preceding session.

The highest and lowest bid/100 for the 364 and 182 days offers were 87.10/ 83.50 and 93.04/ 15.68 respectively while for the 91 and 35 days tenor had 98.16 / 93.00. The minimum successful price/100 for the 364, 182 and 91 days offer were 86.09, 92.70 and 98.16 respectively.

The weighed average price for successful bid for the 364 tenure was 86.34, the 182 days offer was 92.83 and 91 days offer was 98.16.

Major investors in the one year treasury bills are commercial banks, pension funds, insurance companies and some micro-finance institutions.

SOURCE: DAILY NEWS

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