Treasury securities (such as bills, notes and bonds) are conservative instruments that have stood for decades as a bastion of safety in the turbulence of the investment markets, hence attracting both individual and institutional investors worldwide. Backed by the full faith and credit of the government, Treasury securities are generally considered the safest of all investments in the market, having virtually no credit risk, meaning that it is highly probable that the investor receives interest and principal paid fully and on time. However, the returns could be lower compared to other riskier debt securities
The T-Bill rate has remained fairly stable over the last six months, depicting stability of short-run interest rates. Generally, improved liquidity lifts T-bills uptake. However, over the last one month, the rate for the 91-day T-Bill has declined by 3 per cent while that of the 182-day T-Bill has remained stable. Declining performance rate of the 91-day T-Bill reflects decrease in demand, signaling liquidity withdrawals from the money market.
The volume of bonds traded on the bourse over the last one month has decline by close to 50 per cent reflecting a decrease in demand for government-guaranteed securities.
The FTSE Bond Index increased marginally from 91.54 the previous week to close at 91.65 in the week ending July 14, 2017, reflecting a marginal decrease in secondary market yields.