Secondary Market Turnover Edges Up 12.53% during the Week

Secondary market turnover edged up 12.53 percent w/w to 18.69 billion shillings sustaining the recent trend of elevated bond volumes.

The IFB1/2018/15Yr paper accounted for 43.63 percent of the week’s turnover and was mainly driven by the foreign desk.

The increased foreign flows also helped cushion the shilling in the course of the week. Demand was heavy at the long-end of the curve and also the medium-term space received healthy activity in the week.

According to a Bloomberg news article, Treasury is seeking to raise between USD 1.5Bn – USD 3Bn in international sovereign bonds. The government is intent on diversifying its financing sources and the exposure into the foreign capital markets is one of the avenues.

The commercial financing quota in the current fiscal year stands at KES 250Bn (~ USD 2.5Bn) but Treasury had received 10.76 billion shillings as at December 2017.

At this point, precise details are still scanty on the upcoming Eurobond issuances but the yields on the two Eurobond issues offer favorable entry positions.