Treasury bill auction fetches more

LAST week, the treasury bill auction was over-subscribed with bids amounting to over K900 million against the offer of K820.50 million.
This reflects an increase of K98.54 million, which entails that there was increased investor appetite for government securities.

In its daily treasury newsletter, Zanaco notes that the yield rates generally went down.
Under the 91-days tenor, yield rates dropped to 12.5 percent from 12.4 percent while 182-days was at 13 percent from 12.5 percent and 364-days was at 17 percent from 14.50 percent.
“The treasury bills auction received bids amounting to K919.04 million and a total of K820.50 million was allocated,” the bank says.
Similarly, First National Bank (FNB) in its daily newsletter also notes that the treasury bill auction attracted 92 percent of the total subscriptions on Thursday last week due to reduced market liquidity, which is the term used to describe how easy it is to convert assets to cash.
“To no surprise, the reduced liquidity in the market only attracted 92 percent of total subscription in yesterday’s [Thursday’s] treasury bill auction. We are of the view that market players are also reserving their funds for the bond auction on June 30, which is expected to be over-subscribed,” the bank says.
On the local money market, FNB says the Kwacha weakened against the greenback on Thursday owing to increased demand.
The local unit’s weakness witnessed last week is expected to be short-lived given the bond tender auction and corporate tax obligations at the end of the month.
Meanwhile, copper and other major base metals were little changed in early Asian trading on Friday, with investors marking time ahead of this week’s United States inflation-linked indicators.
Three-month copper on the London Metal Exchange stood at US$5,741 a tonne, US$2 below the close of the last session.


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