THE government bond market saw significant volatility in the past year with a surge in demand, leading to a bidding frenzy and inflated bond prices in the first quarter.
To avert the situation, the
Orbit Securities Company Limited Synopsis show that the
In a bond auction held in May last year, the yield was 12.36 per cent and the average price stood at a premium of 101.4. However, in a bond auction held in December last year, the yield increased to 12.7 per cent and the price fell to a discount of 98.54.
It is expected that investors will continue to demand high compensation for lending capital to the government this year, resulting in higher yields on government bonds.
Furthermore, last year the corporate bond market experienced a record-breaking year. For the first time in the history of the
This marked a significant milestone in the market and introduced a range of innovative products.
NMB listed the first social bond in
KCB also issued the first Sukuk, called 'Fursa Sukuk,' which was oversubscribed by 10 per cent.
Sukuk are structured to comply with Islamic principles and involve a sharing of risks and returns between the issuer and investors, rather than being debt obligations.
The corporate bond segment is growing in importance on the
Issuing bonds can be cheaper and provide longer-term financing and greater flexibility for corporations compared to borrowing from banks.
Bond interest rates are typically fixed and bonds offer more time to pay back debt and the ability to structure debt to meet the needs of different investors.
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