Five-year maturity bonds issued by the Tanzanian government have remained attractive despite the end of year obligations that investors have to fulfil, signalling improved liquidity in the market.
According to the National Microfinance Bank (NMB) e-market report, the appetite for overnight funding was seen slightly picking up as investors settled their T-bond auction. In the sale of five-year bond, the government quest to raise 49.60bn/- through the instrument was achieved and surpassed after receiving bids worth 97.86bn/- although in the end only 49.60bn/- was successful.
The weighted average price for successful bids was 74.16 while the minimum successful price/100 was 69.79. Of the 70 bids received, 26 emerged successful. The highest and lowest bid/100 were 77.11 and 50.53, respectively.
The weighted average yield to maturity decreased to 17.06 per cent compared to 18.79 per cent of the five-year bond auctioned in February.
The weighted average coupon yield rose to 12.37 per cent compared to 13.17 per cent of the other session. Some of the key investors in government securities include pension funds, insurance firms, some microfinance companies and few commercial banks.
The funds raised from the sale of the long-term government notes will finance development projects, including road and railway infrastructures aimed not only at cutting down cost of transport but speeding up economic growth.