Bank of Tanzania (BoT)

The Bank of Tanzania (BoT) will on Tuesday float a twelve-month treasury bills tender worth 100bn/- amid expectations of continued striking performance because of easing liquidity stance.

The beginning of the year has seen improved performances on trading of government securities compared to the preceding period when the T-Bills performed poorly in the market due to tax obligations that had overwhelmed investors as well as tight liquidity in the market applied by the Central Bank.

The total amount tendered in the previous treasury bills auction for instance reached 169bn/- against the 100bn/- floated, although the central bank accepted only 95.5bn/- as successful bids. But, the 100bn/- tender floated last December attracted only 71bn/-.

BoT has been working tirelessly on new monetary policies and buyers held back investment resources making yields to continue building up in every primary auction. In tomorrow’s auction, the BoT on behalf of the government has invited applications from both primary dealers and corporate investors to tender in 35 days offer that goes up to 5bn/-, 91 days set at 30bn/-, 182days at 30bn/- and 364days at 35bn/-.

However, analysts hold that as yields in the money market instruments take a downward trend, large investors are expected to channel their funds back into the stock market in the coming weeks to explore advantage of the dividends and long term stock appreciation at equity market.

“We anticipate low to medium level of activity as the rate of return on money market instruments have started to edge downward,” commented the Tanzania Securities Limited (TSL) in a weekly market commentary. The BoT monthly economic review for November last year show high demand for T-Bills in October compared to September 2011.

But, the maturities for the treasury bills tendered in the month of January were oversubscribed. The mounting demand according to the report resulted into over-subscriptions recorded only on the 364 days maturities while under-subscriptions documented on 35 and 91 days and 182 days maturities.

By SEBASTIAN MRINDOKO, Tanzania Daily News



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