With K1.6 billion into Thursday 12 September and a K833 million pipe line in maturities for next week Monday 16 September, the central bank in Africa’s copper producer Zambia. This is the second fully subscribed treasury bill sale of the year of the 19 debt sales. The Bank of Zambia were able to exceed their 20% quota above the offer amount of K950 million at K1.14 billion.
Appetite was strong at K1.51 billion of which 76% was fully absorbed at cost with a skew towards the 1 year attractively priced at 27.5%. With very minimal latitude for yields to rise the 9 month rate ebbed higher by 50bps to 26.5% which housed K392 million representing the second most demanded bucket. Bid cover ratio for yesterday’s debt sale was 1.31.
With Zambia grappling with fiscal deficits, the under subscriptions pose a lag in the revenue raising for the government using the domestic money markets at a time when offshore participation has dwindled given the credit risk posture of the sovereign.
“The average rate of subscription for treasury bills for the year stands at 77% a slight improvement from 74% last year while that for bonds is 24% down from 84% in 2018,” Dean Onyambu an Interest Rate Trader said in a morning commentary on 13 September. Had it not been for treasury bill bids there would have been more pressure on the fiscals, he said.
BT
