THE 15–year Treasury bond auctioned results have changed the course of the rates amid under subscription of 6.46 per cent.
The auction held mid last week also saw the minimum successful price dipping by almost 50 basis points (bps).
Zan Securities, Raphael Masumbuko predicted the trend to continue towards Treasury bill auction today.
“As we are nearing the end of the year, we think this new development will stick with the Treasury bill auctions,” Mr Masumbuko said in the Weekly Market Wrap- Ups report over the weekend.
There are two government securities auction before year end namely Treasury bills today and 20 years Treasury bonds next Wednesday.
Orbit Securities described the last week 15-year Treasury bond as ‘an unusual tendency’ at least following the recent interest fall in long term government securities.
“The lesser appetite for the instrument is seen as the excitement for the next 20 years Treasury bond to be auctioned next week,” Orbit Securities Limited said in a weekly market Synopsis.
The Bank of Tanzania, on behalf of the government, offered a 15 years treasury bond worth 109.2bn/-but the market tendered 102.15bn/- in 70 bids. The central bank accepted 64 bids worth 97.99bn/-.
Similar to the recent trend, the weighted average yield to maturity for the instrument dropped by 13bps to 15.24per cent.
Late last month debt market analysts betted the continuation of government securities yield drop due to high investors’ appetite.
The analysts based their bet on the fact that the central bank seems to hold a grip tight as demonstrated during last month 10 years government paper auction.
Zan said BoT will continue to have the freedom for a few quarters going forward due to investors’ huge appetite for government papers.
The 10 years paper yield to maturity declined by 600 basis points from 15.1573 percent to 14.5153 per cent.