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BankMuscat 3rd CD auction oversubscribed
Muscat, 21 November 2008: BankMuscat, the
leading financial institution in the Sultanate
of Oman, successfully closed its 3rd Certificate
of Deposit (CD) auction issue on 17 November
2008. The issue was oversubscribed to the extent
of RO 19.7 million as against the issue size of
RO 15 million. The weighted average yields
accepted were 5.85 per cent, 6.53 per cent and
6.93 per cent for one, three and five years
respectively.
BankMuscat accepted bids totalling RO 15 million
in the ascending order, starting from the lowest
bid. Having successfully achieved the objective
of raising RO 15 million, the oversubscribed
amount was not allotted.
The auction results truly reflect the market
expectations on local currency interest rates.
Discovering this market sentiment in a
transparent and acceptable way to all market
participants is the main rationale behind
BankMuscat’s initiative to launch the CD auction
programme.
BankMuscat announced the RO 250-million CD
issuance programme in September 2008 with a
one-year timeframe, of which RO 50 million has
been issued so far. BankMuscat plans follow-on
issues every month, which will ultimately lead
to the development of a stable and reliable
local currency benchmark.
The Bank conducted the first CD auction on 15
September with an issue size of RO 20 million.
The second auction was conducted on 15 October
with an issue size of RO 15 million. Like the
current issue, both the previous issues were
oversubscribed. The first issue was
oversubscribed to the extent of RO 40.5 million
and the second issue to the extent of RO 22.7
million. |
