Secondary Market: Trading in the secondary market wavered during Wednesday’s trading session as bond turnover contracted by KES 553.70 million from KES 1.01 billion the previous day. The Federal reserve raised interest rates by 0.25% – a first increase since 2006. The Dollar rallied instantly following the rate decision. The rate hike is likely to place upward pressures on fixed income yields in the local markets.
Money Market: The money market remains liquid, however, liquidity remains skewed in favour of a few banks. Consequently, the monetary regulator has remained active in the money market; providing support through the issue of reverse repos. Meanwhile, the Kenyan shilling weakened against the US Dollar by 0.12% to 102.35 yesterday, resulting in the USDKES pair remaining within bounds as insignificant market factors prevail. We anticipate further downward pressure on the KES in the coming days as the Dollar takes on a strong stance.
Upcoming Auctions
- 16th December 2015 – KES 6.0Bn 182 & KES 6.0BN 364-day T-bills
- 17th December 2015 – KES 4 Bn 91 day T-bills
