Fri­day Bond Auc­tion Eclipses Thurs­days Trea­sury Bill Sale as Play­ers Pre­serve Funds

Zambian Business Times - - FINANCIAL MARKETS -

THE trea­sury bill sale for Thurs­day 26 Nov was eclipsed by Fri­day 27 Nov bond auc­tion. On of­fer was ZMW900mil­lion with bids to­talling ZMW407mil­lion yet ZMW398mil­lion was ab­sorbed. This trans­lated to a bid - cover ra­tio of 1.02. The auc­tion was 56% un­der­sub­scribed.

Ap­petite for the 1yr –most at­trac­tive price tenor at 15.5% - was high as ex­pected ac­count­ing for 75% of the Trea­sury bill sale.

Most play­ers shied away from Thurs­day’s auc­tion in an­tic­i­pa­tion of Fri­day’s bond auc­tion where ex­pec­ta­tions are that yields would start to rise. With a de­layed IMF deal pack­age, govern­ment is ex­pected to place reliance on do­mes­tic money mar­kets to fund its obli­ga­tions. As a re­sult the Kwacha yield curve will come un­der pres­sure.

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