Trade on Shorter Tenors Dominate The Bourse on Thursday

Trades on shorter tenors dominated trading on Thursday as investors sought a home for the excess liquidity with a turnover of 3.4 billion shillings from 2.4 billion shillings the previous day.

The Economic Experts, Genghis say that they expect demand to remain high on the shorter dated papers; demand on the longer dated papers may slow down due to the upcoming 7-year tenor bond.

This week’s T-bill auction saw little movement in the rates with conservative bidding across the board. The CBK received 42.0 billion shillings in bids accepting only KES 29.0Bn. The 91-day T-bill rate was at 8.72%, the 182 days at 10.40% and the 364 days at 10.92%.

The 182-day T-bill saw the heaviest interest receiving 19.0 billion shillings in bids; Genghis expects this to be the trend in the short term as investors seek to balance their exposure which had been skewed towards the 91 day and 364-day T-bill due to the suspension of the 182 day T-bill for a period.

The CBK was in the market to mop up for the first time this week sighting excess liquidity in the market. They received bids worth 15.4 billion shillings accepting only 12.0 billion shillings at 5.87 percent. As expected, the overnight rate stayed flat at 5.6 percent on lower volumes of 9.7 billion shillings as we head to the close of the CRR cycle.