TRYNESS TEMBO, Lusaka
LAST week, the treasury bill auction was oversubscribed attracting bids amounting to over K2 billion against an offer of K810 million while the Kwacha is anticipated to maintain its upward trend against the United States (US) dollar in the short term, financial market players note.
Cavmont says due to the oversubscription of the treasury bill auction resulted in the yields to fall across all tenors with the 91 days at 12.5percent from 14 percent and the 365 days at 14.49 percent from 16 percent.
“Thursday’s treasury bill auction was oversubscribed by 100 percent as total bids amounted to K2, 185.73 million against an auction size of K810 million which was being offered,” the bank says in its market report.
On the local currency market, the Kwacha closed Friday’s trading at K9.20 and K9.25 and is likely to remain range bound in the short term as suggested by current trends.
The bank says the local unit on Friday stood its ground against the dollar, opening at K9.20 and K9.27 and touched an intra-day high of K9.20 and K9.25.
Cavmont says the Kwacha’s stability was mainly due to steady supply from corporates coupled with subdued demand from buyers.
Similarly, Zanaco, in its daily treasury newsletter says the short term view is that the Kwacha will continue to be supported by dollar sell-offs by offshore players as well as local corporates meeting mid-month tax obligations.
The bank says the local unit’s trading range is expected to remain wide between K9.20 and K9.30 on the bid and offer respectively.
Meanwhile, copper price on the international market edged higher yesterday rising for a fourth straight session and trading near their highest since April 10, buoyed by strong demand from China and concerns over tight supplies from Chile.
Reuters reports that three-month copper on the London Metal Exchange was up by 0.1 percentage point at US$5,808 a tonne. In the previous session, it hit US$5,832 a tonne, highest since April 10.