THE 15-year government bond yields rate is projected to decline amid oversubscription when the instrument goes on sale today.
The government wants to borrow from the public 122bn/- at a coupon rate fixed at 13.50 per cent for 15 years. However, debt market analysts projected yields rate decline based on last week’s auction results.
Zan Securities Chief Executive Officer, Raphael Masumbuko projected yield rate decline based on last week Treasury bill auction.
“We expect a decline in yields in the next week’s Treasury bond auction owing to [last] week auction results,” Mr Masumbuko said through Zan’s Weekly Market Wrap-Ups.
Also, Tanzania Securities’ Weekly Market Blast estimated the yields to decline while the bond is expected to be oversubscribed based on growing appetite for government securities.
“The government securities yield curve may continue to remain normal, and weighted average yields are expected to decline. “…This indicates low funding cost by the government,” he said.
The firm also said “we may see oversubscription of the treasury bill due to the higher appetite for government securities.”
Mid-last week, the central bank offered Treasury bills worth 90.23bn/- and the public responded by offering 179bn/-. However, BoT accepted only 84.52bn/- while no tenor saw a successful amount more than the offer.
“Despite the oversubscription, the 364 days tenor saw a successful amount less than the offer size,” Orbit Securities said through its Weekly Market Synopsis.