Secondary Market Turnover Up to KES 2.29Bn on Monday

Secondary market turnover increased slightly to 2.29 billion shillings from the previous recorded 1.94 billion shillings mainly driven by trades that were closed out on Friday.

The trades were mainly propelled by shorter-term duration papers where supply has been high. The sale period of the May primary bond issue, FXD1/2018/15yr, closed on Monday and analysts expected turnover to decrease slightly as investors adopt a wait-and-see approach.

“We expect bids to be higher at the primary issue as investors naturally would seek higher yields for holding the longer-tenor bonds,” said analysts from Genghis.

With the net domestic borrowing slightly ahead of its schedule and the current favorable macroeconomic environment, CBK is keen on holding the rates steady at current levels.

Interbank rate decreased to 5.52 percent from 5.83 percent, an indicator of improved market liquidity condition.

The current high liquidity levels coupled with the 2-year bond that matured on Monday finding a home in the short-end segment and thus we are not optimistic about superior subscription of this month’s primary bond issue.

Kenya’s coffee earnings declined 10.69 percent y/y to 11.7 billion shillings in the seven month period to April 2018.

The volumes offered on sale declined from 26.9 million kilograms to 25.3 million kilograms in the review period, attributed to wet weather condition at the beginning of the season (i.e. October 2017).

The decline in earnings has been occasioned by low international prices for Arabica which has depressed average auction price to 23,000 shillings in April 2018.