Zambias 1yr Treasury bills are Africa’s most attractive currently

Africas second largest producer of copper Zambia is in the lime light again because its 1yr treasury bills just became the continents most attractive today. Yesterday Stone Harbor Investment Partners u-turned from emerging market assets to focus on Zambian, Ghanaian, Ivory Coast and Angolan dollar debt because of its remarkable performance over the last 1year. It appears those in search for yield might consider Zambian 1yr Kwacha paper too.

In Thursday 28 sept. treasury bill auction, appetite for 1yr paper was very evident when demand took up 93.8% of the auction. Bids for 1yr totaled ZMW848.6million with the entire demand absorbed in allocation. Weighted average yields on the treasury bill tenor was 15.9494% from 14.8922% – 106bps higher than a fortnight ago.

Given the current fundamentals in totality, a fairly stable currency, single digit tamed inflation of 6.6%, a Standards and Poors B rating with positive outlook, our analysts are of the view that Zambia’s 1yr treasury bills are the most attractively priced government debt in Africa. Zambia’s 1yr treasury bills are currently paying higher than Nigeria, Tanzania,Kenya, South Africa and Uganda given current level of inflation.

The treasury bills have been attractively priced from the rest of the Kwacha yield curve for 6 weeks now and today’s auction outcome just made yields sweeter.

More articles on Zambian Treasury bills.