INVESTMENT into the treasury bills has dipped with the number of bids received continuing to decline ending the trading session undersubscribed.
Low investors’ appetite into the treasury bills is seen in the three consecutive auctions, that is, two in December and one held last week, ended up undersubscribed.
The total amount tendered in the treasury bills auctioned last week was 34.4bn/- compared to 62.9bn/- and 60.1bn/-in December last year, respectively.
The total number of bids received declined to 23 compared to 40 and 30 received in the two auctions held in December last year.
According to the Bank of Tanzania (BoT) summary for last week’s auction, the 364 days tenor was substantially undersubscribed by 77 per cent while the 35 days, 91 days and 182 days tenors were all oversubscribed by almost 100 per cent.
The BoT offered a total of 107.2bn/- to the public and received 23 bids worth 34.41bn/- and at the end it accepted 20 bids worth 28.8bn/- while the weighted average yield to maturity (WAYTM) dropped by 20bps.
The total weighted average yield to maturity realized was 5.48 per cent compared to 5.68 per cent realized in the previous auction.
The drop in weighted average yield to maturity was a result of increased interest in other tenors different from the 364 days tenor which gained 3bps on its yield to maturity.
The 364 and 182 instrument are used by the government to raise funds for budget financing while the 91 and 35 days offers are used to mop up excessive liquidity in the circulation.
Commercial banks are key players taking over 60 per cent of the market share in the investment on the treasury bills.
Other key investors are pension funds, insurance companies, some microfinance institutions and retail investors.