Should investors buy tomorrow’s bonds or wait?

TANZANIAN investors must make an important decision before Wednesday, October 28, 2026. The Bank of Tanzania will reopen a 12.25 per cent, 20-year fixed-rate Treasury bond while global markets await the United States Federal Reserve’s interest-rate decision.

Investors must decide whether to enter the auction before the global direction becomes clearer or wait and consider purchasing the bond in the secondary market.

The security is Treasury Bond No 710, Issue 276, originally issued on July 8, 2026 and redeemable on July 9, 2046. A buyer at the reopening will therefore have approximately 19 years and eight months remaining, rather than a new 20-year term.

The auction offers 326.71bn/- through competitive bidding and 36.30bn/- through non-competitive bidding. Bids submitted through Central Depository Participants will close at 11:00 am on October 28 . Settlement will take place on October 29, while secondary-market trading is scheduled to begin on October 30 .

The bond pays a fixed coupon of 12.25 per cent per year, with interest-payment dates on January 9 and July 9.

Interest income is exempt from withholding tax. However, the 12.25 per cent coupon is not necessarily the return an investor will earn.

The effective yield depends on the accepted auction price. Buying below the bond’s face value produces a higher effective yield, while buying above face value produces a lower yield.

Investors must also account for accrued interest of 3.7589/- for every 100/- of face value. For example, an investor bidding at a clean price of 100/- for 1m/- of face value would pay approximately 1,037,589/- at settlement, excluding intermediary charges.

The additional 37,589/- represents interest accumulated since the previous coupon date. It is not an auction fee, but it must be included when calculating the amount required for settlement. The auction is taking place while oil prices are rising strongly.

On the market feed used for this analysis, Brent recovered from a July low near US dollars 70 and moved through resistance levels around 81.80 US dollars, 85.10 US dollars and 91.70 US dollars .

After moving above 91.70 US dollars, the market spent approximately 39 trading bars, equivalent to about 53 calendar days, consolidating and building momentum. The next major resistance area is between approximately 113.50 US dollars and 115.50 US dollars.

Brent reached 115.50 US dollars on March 9, followed by tests near 113.08 US dollars on March 16, 113.60 US dollars on March 27 and 113.48 US dollars on May 4.

On Friday, October 23, the market feed recorded a high of approximately 112.95 US dollars. This brought Brent close to resistance but did not confirm a breakout.

If Brent rises above 113.50 US dollars and remains there, the move may confirm a continuation of the upward trend. If it reaches that area and falls back, the market may be rejecting the resistance.

Possible areas to watch below are approximately 108 US dollars, 104 US dollars and 100 US dollars. These levels matter because sustained high oil prices could eventually increase fuel, transport, food and production costs in oil-importing countries such as Tanzania.

The oil movement also received support from United States inventory data.

The EIA report released on Wednesday, October 21, covering the week ending October 16, showed commercial crude inventories falling by 3.061m barrels.

The market had expected a decline of only 0.8 million barrels. Gasoline stocks fell by 2.952 million barrels against an expected decline of 0.4 million barrels.

However, distillate inventories increased by approximately 1.675 million barrels, while Cushing crude stocks rose by around 0.987 million barrels.

The report supported higher oil prices but was not entirely bullish. The Baker Hughes report released on Friday was nearly neutral. Oil-directed rigs increased from 459 to 460, while the total number of rigs remained unchanged at 603.

One additional rig does not immediately produce enough oil to remove current supply concerns. EIA data describe present inventories, while rig numbers provide an indication of possible future production.

Other countries are already demonstrating why investors should take inflation and interest-rate risks seriously. On October 23 , Russia’s central bank maintained its key rate at 14 per cent and increased its 2026 inflation forecast to between 7.1 and 7.6 per cent.

Petrol prices had risen by 21 per cent since the beginning of the year, while diesel prices had increased by 13.4 per cent.

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Russia is therefore facing high inflation, high borrowing costs and weak economic growth at the same time.

Mexico’s mid-month October figures showed headline inflation increasing to 3.62 per cent from 3.42 per cent. Monthly core inflation was 0.25 per cent, above the forecast of 0.18 per cent and the previous 0.17 per cent.

Annual core inflation edged slightly lower from 3.79 per cent to 3.78 per cent. The figures therefore showed a stronger short-term inflation surprise, although annual coreinflation did not accelerate. India has responded more directly.

At its October meeting, the Reserve Bank of India raised its repo rate by 25 basis points to 5.50 per cent and changed its policy position to calibrated tightening. It also raised its inflation forecast to 5.2 per cent.

The concern is that temporary increases in oil, food and other costs could spread through the economy and become more persistent. Japan’s recently released trade figures, covering April to September, showed a deficit of JPY 2.81tri/-.

Imports increased faster than exports partly because Japan had to pay more for oil, while the weak yen increased the local cost of dollar-denominated energy.

These are not Octoberperiod inflation figures, but they provide newly released evidence of how expensive oil and a weak currency can affect an importing economy. The Bank of Japan will announce its next policy decision on October 30.

Tanzania faces a similar transmission risk. Petroleum is purchased internationally in US dollars. If Brent rises while the dollar strengthens, importers must use more shillings to buy the same amount of fuel.

This can eventually increase transport charges, food prices and business costs. The Bank of Tanzania may then have less room to reduce interest rates, while bond investors could demand higher yields to compensate for inflation risk.

The Federal Reserve meeting is scheduled for 27–28 October. Markets generally expect the Fed to hold its policy range, although another increase in December remains possible.

The Fed normally releases its decision at 2:00 pm Eastern Time, equivalent to approximately 9:00 pm in Tanzania on October 28.

Tanzania’s bond auction will have closed about ten hours earlier. Investors therefore cannot wait for the Fed’s announcement and still participate in the primary auction.

An investor seeking greater clarity must skip the auction and consider the secondary market from October 30. However, secondary trading does not guarantee that enough bonds will be available or that the price will be more attractive.

For an investor seeking long-term shilling income and intending to hold the bond until 2046, participating may be reasonable if the auction price provides an acceptable effective yield. For an investor who may need the money earlier, the long remaining maturity creates greater price risk.

If market yields rise, the resale price could fall. Foreign investors must also consider the possibility that shilling depreciation could reduce returns when converted into another currency.