Treasury bills’ minimum successful bids and weighted average prices have been decreasing consecutively in the last nine months throughout the year.
The bills’ prices on average have dropped from their highest of 99/84 in the auction held last August to 99/67 in the auction held on the third day of May.
Tanzania Securities’ Treasury Bills Analysis report issued yesterday showed that the last five auctions recorded the same price of 99/67.
“Investing in Treasury bills may not make sense, especially for individual investors seeking higher yields and optimum long-term growth.”
However Treasury bills are considered low-risk investments offering competitive yields compared to other similarly safe investments, such as bank savings accounts, the Tanzania Securities report said.
The 364 bill offers yields of 7.22 per cent.
However, the report said, the bills are crucial and valid to institutional investors such as banks and insurance companies for liquidity purposes.
On the other hand, the T-bills weighted average yields have improved from their lowest value of 1.68per cent recorded last August to 3.45per cent at the last auction.
Additionally, unlike other bills, the 364 days T-bill has the highest investor appetite among the four T-bills because it is the most transacted.
“The T-bill has been transacted in all the past 23 auctions and with it being oversubscribed in most of the auctions.
“The yield trend of the 364-day bill has been increasing throughout the year,” the report said.
The 364 days T-bill yields have improved from 3.3 per cent reported on the auction that occurred last May to the all-time high of 7.2 per cent recorded on the auction conducted in mid-January.
Also, unlike other T-bills, the weighted average price of 364-day is always higher than the minimum successful bid because of the large number of bids at different prices.
The 182-day T-bill’s weighted average yield keeps on increasing while prices drop. The bill recorded the highest price of 99/16 with the lowest yield of 1.7per cent in the auction held last May. On February 8, the bill recorded the highest yield of 5.23 per cent with the lowest price of 97/46. On the last traded auction, the bill recorded a yield of 5.4 per cent with a price of 97/38.
“The 91-day T-bill has a similar characteristic to that of the 35-day bill in that both minimum successful bids and weighted average prices have been decreasing throughout the year,” the analysis said.
The weighted average prices of 91 days have dropped from the highest of 99/41 recorded last June to 99/20 recorded on the last auction.
While the weighted yield also improved from 2.4 per cent to the highest of 4.0 per cent recorded on the last auction.
Additionally, the 35 days T-bill minimum successful bids and weighted average prices have been decreasing throughout the year.
Prices have dropped from their highest of 99/84 in the auction held last August to 99/67 in the auction held on May 3, which was similar to the prices of the last five auctions.
However, the 35-day weighted average yields have improved from their lowest value of 1.68 per cent recorded last August to 3.45 per cent at the last auction.
The 364-day Treasury bill is the most transacted security, transacted in all 23 auctions, followed by the 182-day, which was transacted in 15 out of 24 auctions and the 91-day was transacted in 11 auctions, the same as 35-day T-bills.