One year treasury bills have continued to attract the most liquidity as they remain attractively priced in a sovereign stressed environment. The eleventh treasury bill sale of the year 2021 saw the first oversubscription in the last five (5) short term debt sales. The auction recorded strong appetite of K2-billion in bids of which K1.7-billion were absorbed.
The treasury bill sale performance for June 03, is an extension of the strong bond performance seen on May 28 as investor confidence in Zambia starts to climb. Of the K700-million one year assets on offer, over a yard of demand was observed of which K940-million was absorbed at 25.5%, a 25 basis points rally from previous levels in yield.
Yields sagged 200bps to 18.0001% for the 9-months while the 3-month tenor infinitesimally ebbed to 4.3bps to 13.9884%.
INFLATION SPIRAL AND EASING YIELDS NEGATE PREMIUMS FURTHER
The May 150bps inflation climb to 23.2% and the decline in yields in yesterdays debt sale, sank the treasury bill curve further underwater save the 1-year whose real yields remain positive. Much as sentiment on the copper producer is improving, players skew still remains towards shorter dated higher yielding assets as they manage duration risk.
The Kwacha Arbitrageur