Tanzania: Treasury bill auction undersubscribed

Jan 08, 2014

Investors' participation in Tanzania's latest Treasury bond auction was significantly below expectations, it has been revealed.

Investors' participation in Tanzania's latest Treasury bond auction was significantly below expectations, it has been revealed.

The Bank of Tanzania (BoT) reported that the auction conducted on December 31st
was undersubscribed, with only 39 bids out of 75 received
being
successful.

"The New Year's Eve Treasury Bills Auction results were a pure reflection of the liquidity pressure facing the market due to the massive end of the year outflows," said Head of Treasury Henry Lesika, quoted by Tanzania Daily News.

He said that investor
turnout
was
less than 35 per cent, the lowest since July 2013. The Central Bank capped its cost at 16.26 per cent accepting only Sh12.67 billion (€5.8 million) out of the Sh55.47 billion tendered and Sh160 billion originally sought.

These results contrast with Tanzania's latest 15-year bond issue last November, which was well received on financial markets, being oversubscribed by 140.3 per cent.

The total amount tendered reached Sh36.08 billion (€16.5 million), while Sh15 billion was originally sought to finance several infrastructure projects.ADNFCR-2976-ID-801679810-ADNFCR