The first business day of 2020 was marred by a deep subscription haircut in the Kwacha treasury bill sale as the central bank only raised K157million of the K950million on offer. This outcome is comes after the dismal last bond sale of 2019 where the Bank of Zambia sold only K58million of the K1.1billion of assets on offer.
Thursday 02 Jan outcome is a 16.5% subscription which sets a K793.1million ($54.7million) funding gap in on the second day for the year. Despite weak purchasing power into the auction the treasury bill auction raised twice what the last fixed income sale of the year sold.
Appetite was anaemic with K188.6million given the cash crunch in the market post implementation of the cash reserve requirement 23 Dec. 2019 which mopped K1.6billion from circulation.
Yields however were unchanged with the one year still paying 27.5%.
The Kwacha Arbitrageur