The Treasury has re-opened 5-year and a 10-year (FXD1/2008/15 & FXD1/2017/10) maturity worth KSh30 billion Treasury bond.
This will be the sixth offering of the benchmark paper (FXD1/2017/10).
“Activity on the secondary market kept pace in Tuesday’s session trading KES 2.7Bn driven by trades in the medium term space,” notes Genghis Capital Analysts in a market research note.
The bonds are intended for budgetary support with the bidding expected to be open 7-13 December.
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“Meanwhile, the economic lull has contributed to lower projected tax revenue collection and increased the government’s debt appetite in an effort to bridge the revenue gap. However, Treasury auctions have generally underperformed in the current financial year triggering the government to delay its economic development plans so as to steer funds to finance the ballooning recurrent expenditure,” notes the Commercial Bank of Africa Limited (CBA) Monthly Economic Report for December 2017.
On the other hand, Cytonn Investments November update, yields on government securities in the secondary market have remained relatively unchanged in November, only recording slight upward movement for the tenor of 3-5 years.
“On a year to date basis, the yield curve has experienced a downward pressure leading to declining in yields. According to the FTSE NSE Bond Index, Treasury bonds listed on the Nairobi Securities Exchange (NSE) gained 1.1 percent during the month, bringing the YTD performance to 13.6 percent.”