LIQUIDITY improvement in the circulation and slight increase in yield rates made treasury bills to bounce back to oversubscription after 120 days of poor performance.
According to Bank of Tanzania (BoT) auction summary the government instrument fetched 238.6bn/- compared to 141bn/- offered to the market for bidding. The last treasury bills session to witness outstanding performance was held on April 4th, this year.
Zan Securities Limited Chief Executive Officer Mr Raphael Masumbuko attributed the treasury bills oversubscription to improved liquidity among investors.
“Investors decision to invest on treasury bills is good deal,” he said adding that customer deposits reported in quarter two this year by most commercial banks have improved compared to the preceding quarter.
Commercial banks are some of the key investors in treasury bills controlling over 60 per cent of the market share. Other investors are pension funds, insurance companies and some microfinance institutions.
He said the execution of mega government infrastructures is one of the reasons for the improved liquidity in the circulation. Also, yield rates for the government note increased slightly to 8.06 per cent for the 364 days offer compared to 7.97 per cent of the session held two weeks ago.
For the 1882 days tenure, yield rates improved to 5.29 per cent compared to 4.97 per cent of the preceding session. Yield rates for the 91 days offer increased to 2.99 per cent compared to 2.90 per cent of the previous session.
The weighted average price for successful bid was 92.56 for the 364 days offer compared to 92.64 of the previous session.