Secondary market turnover continued to rally hitting 3.1 billion shillings on Thursday heavily skewed to the short and medium end of the curve.
The confirmation of this month’s primary issue FXD1/2018/15 is expected to further spur demand on the short-end.
The CBK published this month’s prospectus where they will be issuing a new 15-year bond with a coupon of 12.65 percent with an offer value of 40 billion shillings.
The conservative coupon is a good indicator of what to levels to expect on the average rate from Central Bank of Kenya.
The shilling closed at an average shy of 100.60 at 100.59 in Thursday’s session. “We may see intervention today (Friday) to meet some of the demand,” said Genghis.
The money market overnight rate continued its decline closing at 4.2 percent with a mop-up by the regulator expected.
“We continue keeping an eye on the 10-year tenors with bids expected to come off to 12.70-12.85 percent levels as investors look to take positions ahead of the primary,” said Genghis.