Nine month govie reprices 50bps higher in poorly subscribed auction

Nine months treasury bill yields repriced 59 basis points higher to 27% in a poorly subscribed government security debt sale on the eve of Zambia’s Independence Day celebrations. With only about K453million of cash into the 23 October, the central bank in Africa’s copper hotspot managed to raise only K323million in cash terms translating to 34% subscription.

Appetite as forecast was anemic with bids totaling K403million of which K293million for 1 year paper paying 27.5% as K101million housed in the 9 month at 27%. Of the K394million of bids on the long end of the Kwacha curve, K314million was absorbed in cash terms. Yields across other tenors were unchanged:

This undersubscription comes at a time when liquidity was mopped by K704million in settlements earlier on Monday which thinned market cash position.

The Kwacha Arbitrageur