More investors eye treasury bills

Bank of Namibia
Bank of Namibia

The Bank of Namibia (BoN) has attracted more interest in the treasury bills auction than what was up for offer, suggesting that the nation still has a surplus of high-quality assets for investors to put their money into.

The total amount bidders wanted was 165% more than what was available, reaching N$2,09 billion.

These results were announced by the central bank last week.

Treasury bills are financial instruments through which the state borrows and are issued for either 91, 182, 273 or 365 days.

The minimum amount to invest in treasury bills is N$10 000, and the coupon (interest) paid on this is always more.

According to the bank’s media release, BoN didn’t accept bids totalling N$848,96 million, which is 40% of all the bids they got.

This shows that there’s still a strong demand for Namibian treasury bills, even though the interest rates in this auction were higher.

In the auction for the bills maturing on 23 February 2024, there were 23 bids received, totaling N$429,2 million.

Out of these, only 14 bids succeeded, but 13 were allocated. The interest rates ranged from 97,8 and the highest yield at 8,7 to the highest price at 97,8 and the lowest yield at 8,6.

The bills due on 24 May 2024 had 28 bids totaling N$521,4 million, however, only 17 bids were successful, and 16 were fully allocated.

The yield showed the ups and downs of investor interest, ranging from 95,7 at 8,8 to 95,8 at 8,7.

The bills maturing on 23 August 2024 attracted 34 bids totaling N$544,7 million, with 22 bids being successful, while 21 were fully allotted.

Once more, interest rates wavered, ranging from 93,7 at 8,9 to 93,7 at 8,8.

Lastly, the bills set to mature on 22 November 2024 saw 33 bids amounting to a N$603,5 million.

Of these, only 14 bids succeeded with 13 being fully allocated.

Overall, the results show that investors have a great appetite for Namibia’s treasury bills.

The central bank once stated that the bills are auctioned off to give both the public and organisations an equal opportunity to invest in government debt.

BoN places advertisements on its website, on the Reuters system and sends emails officially inviting the public to participate in tenders for these bills.

Advertisements are placed one week prior to an auction date and tendering forms are obtained from the central bank’s website and office in Windhoek.

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