Selling a Treasury Bond Before Maturity on the DSE

A Treasury bond can last up to 25 years, but you do not have to hold it that long. Bonds are listed on the Dar es Salaam Stock Exchange (DSE), where investors buy and sell them before maturity. This is called the secondary market.

What the notice says

The notice for bond No. 722 (BoT notice) states that the bond will be listed on the DSE and that secondary trading is in multiples of TZS 100,000, starting on a set date after the auction.

How to sell

1. Contact your CDP or a licensed DSE broker, the same kind of firm that holds your CDS account.

2. Tell them which bond and how much face value you want to sell (in the allowed multiples).

3. Agree a price or a limit. The broker looks for a buyer on the exchange.

4. Once a buyer is matched, the trade settles: the bond leaves your CDS account and the money is paid to you, less broker and exchange charges.

What decides the price

• Market yields today. If yields have risen since you bought, your bond's price will be lower; if they have fallen, it will be higher.

• Years left. The longer the time to maturity, the more the price moves when yields change.

• Demand. Some bonds trade more often than others. Large, often-reopened bonds usually find buyers more easily.

• Accrued interest. The buyer usually also pays you the coupon earned since the last payment date.

Before you decide to sell

• Ask for the current price and all charges in writing.

• Compare with recent auction yields for a similar tenor on the yield trends page.

• Remember that holding to maturity returns the full face value; selling early can mean a gain or a loss.

Follow yields by tenor on yield trends to see how the market has moved since you bought.

This article is for education only and is not investment advice. Examples marked as illustrations are not current rates. Confirm terms in the official Bank of Tanzania notice and speak to a licensed adviser before you invest.