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