LAST week’s Bank of Zambia (BoZ) bond auction was marginally under-subscribed attracting bids amounting to K1.09 billion against an offer of K1.5 billion.
This means that there was less demand for financial securities below the total initial target that was offered.
“The 07/2020 bond auction was held on Friday. The auction netted K1,090 billion from the target of K1,500 billion, which was fair enough considering the previous bond auction turnout from the past few months,” Absa Bank Zambia Plc said in its market update.
The bank said this can be attributed to the current high liquidity levels in the market.
Currently, liquidity stands at over K5.19 billion.
“We reckon that yields remained flat because the run acts as a benchmark against the COVID-19 bond auction which means yields have to remain attractive in order to raise the remaining balance of K2.6 billion,” the report reads.
On the local currency market, the local unit is expected to trade steady with a bias to strengthen as corporates settle their month-end obligations in the near term. CLICK TO READ MORE