Government will offer two treasury bills, each worth P500mn in order to raise P1.0bn. One of the bills matures in three months on December 12, while the other will mature in six months on March 12.
In the front run, commercial banks were expected to bid aggressively at Friday (Sept 7th)’s auction, competing for the risk-free rate and the strong returns offered by the treasury bills.
The recent IMF report noted that banks profitability improved during H2 2011 and with the introduction of these instruments in the market will continue to support these banks interest income.
Both treasury bills are being offered under the government P15.0bn domestic bond program approved by parliament last February.
Meanwhile, yields on the 14 and 91 day displayed mixed movements indicating the investors’ appetite for short term horizon vehicles. As it stands, 14-day BOBc yield a return of 4.7 percent and 91-day BOBc, 5.36 percent. (Motswedi Securities)
