SHORT term maturities have continued to be attractive investment avenue for investors sending the government note to an oversubscription.
Commercial banks which are among the key investors in debt instrument have increased their investment portfolio due to increased risks in the core business lending. The 12 months treasury bills auctioned last week attracted bids worth 289.97bn/- , up from 169bn/- sought to be raised from the public.
Other investors in government securities apart from commercial banks that command about 60 per cent market share are pension funds, insurance companies, few microfinance institutions and individuals.
Other investors in the treasury bills auction are pension funds and some microfinance institutions. However, apart from oversubscriptions, the government retained 165.85bn/- as successful amount slightly below 169bn/-, the amount offered to the market for bidding.
Central Bank uses the short-term government note to mop excess liquidity in the circulation. Interest rates on the 364 tenure declined to 9.65 per cent from 9.86 per cent and 10.24 per cent of the two previous sessions.
Yield rate on 182 days tenure declined to 7.33 per cent from 7.35 per cent and 7.68 per cent of the preceding sessions. Weighted average yield declined to 7.27 per cent from 9.28 per cent and 9.37 per cent of the session held two weeks ago.
Weighted average price for successful bid increased to 91.22 from 91.05 and 90.73 per cent the last sessions. The 364 days tenure attracted bids worth 220.72bn/- compared to 100bn/- offered to the market and at the end 133.6bn/- was retained as successful amount.
The 182 days offer attracted bids worth 68.25bn/- compared to 65bn/- offered to the market for bidding and 31.25bn/- was kept as successful amount. The two tenures, 364 and 182 days offer commanded over 98 per cent to the total bid tendered to the market.
The number of successful bids was 107 out of 157 that participated in the one year treasury bills auction. The highest bid/100 and lowest bid/100 was 92.19 and 88.49 respectively while minimum successful price/100 was 91.10 and 96.23 with weighted average price for successful bid was 91.22.