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T-Bills Undersubscribed As Government Remains Ahead of its Domestic Borrowing

BY Soko Directory Team · April 16, 2018 09:04 am

Treasury bills were undersubscribed last week with the overall subscription rate coming in at 87.1 percent compared to an overall subscription of 107.0 percent the previous week.

The subscription rates for the 91, 182 and 364-day papers came in at 43.9, 69.5, and 121.9 percent respectively compared to 73.9, 71.6, and 155.6 percent respectively the previous week.

Yields on the 91, 182 and 364-day papers remained unchanged at 8.0, 10.3 and 11.1 percent respectively.

The overall acceptance rate remained unchanged at 99.4 percent with the government accepting a total of 20.8 billion shillings of the 20.9 billion shillings worth of bids received, against the 24.0 billion shillings on offer.

Domestic borrowing

The government is currently 17.9 percent ahead of its domestic borrowing target for the current fiscal year, having borrowed 276.7 billion shillings against a target of 234.6 billion shillings (assuming a pro-rated borrowing target throughout the financial year of 297.6 billion shillings).

Bonds

The Kenyan Government has re-opened 2 bonds, FXD 1/2008/15 and FXD 1/2018/20, with 4.9-years and 19.9-years to maturity, and coupons of 12.5 percent and 13.2 percent respectively.

The government will be seeking to raise 40.0 billion shillings for budgetary support. The re-open sale period will end on 24th April and hence we will give our bidding range in next week’s report.

Liquidity

Liquidity levels increased in the money market as indicated by the decline in the average interbank rate to 6.1 percent from 6.3 percent recorded the previous week, and there was an increase in the average volumes traded in the interbank market by 9.7 percent to 22.7 billion shillings, from 20.7 billion shillings the previous week, as banks borrowed from each other for PAYE tax remittances.

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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