Namibia: Low banking liquidity lowers demand for treasury bills

Nov 17, 2016

Investors are looking for better yield markets, according to a financial securities firm.

The banking liquidity position has deteriorated in Namibia, which is lowering the demand for treasury bills, according to a new report from financial securities firm Simonis Storms Securities (SSS).

It noted that none of the bonds were fully allocated in October.

"We are of the view that investors are looking for better yield markets. The low demand at current prices will result in government bond yields to rise at the longer end of the curve which will eventually lead to a steepening yield curve going forward," Director of Research at SSS Purvance Heuer said in the report, seen by the Namibia Economist.

SSS also stated that the slowing private sector credit extension will further put pressure on economic growth, adding that "borrowing across all credit instruments continues to decline on an annual basis".

The only exception was loans and advances, which grew by 18 per cent in September, compared to 14 per cent in the prior year.