The Summary of the Week: Market Turnover, Shilling and the Money Market

Secondary market turnover declined 36.04 percent during the week to 10.50 billion shillings in the trades that were spread out across the yield curve and were bolstered by cross over transactions.

Notably, the 23-year maturity paper – SDB1/2011/30 – recorded 8.72 percent of total activity during the week.

The TAP Sale was announced in the course of the week with CBK seeking 27 billion shillings to plug the deficit from the prior week’s primary auction.

The TAP Sale results were disappointing with only 3.82 billion shillings attained. This was mainly as a result of the longer-end tenors of the two bonds which were not attractive to the main investing block, banks.

The Shilling Vs USD

The shilling traded in the 101.32 – 101.75 band in the course of the week against the US dollar and was supported by increased horticultural inflows that sustained the end-month greenback demand.

The dollar weakened slightly at the tail end of the week following Trump’s tariff proposals on steel imports. The net foreign reserves, which closed the prior week at USD 7.24 billion is expected to be bolstered by the net proceeds of the recently issued Eurobond.

The Money Market

The average interbank rate declined 52bps to 4.76% in the week. Volumes were elevated during the week at KES 70.47Bn which was 22.57Bn higher than in the previous week.