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Kenya’s Eurobond Yields Continue to Increase As Investors Withdraw

BY Juma · June 4, 2018 06:06 am

Kenya’s yields on the Eurobonds has continued to increase on account of dampening investors sentiments according to a brief released by Cytonn.

According to Bloomberg, the yield on the 5-year Eurobond issued in June 2014 increased by 1.1 percent points to 5.2 percent during the month of May.

The increase in yields was from 4.1 percent in April, while the yield on the 10-year Eurobond (2014) increased by 50 bps to close at 6.6 percent from 6.1 percent during the same period.

“Yields on Kenya Eurobonds have recently been increasing on account of dampening of investor sentiments, which can be attributed to the recent unfolding of corruption scandals in the country,” read the report.

During the week, the yields on the 5-year and 10-year Eurobonds issued in 2014 rose by 40 bps and 20 bps to 5.2 percent and 6.6 percent from 4.8 percent and 6.4 percent respectively.

Since the mid-January 2016 peak, yields on the Kenya Eurobonds have declined by 3.6 percent points and 3.1 percent points for the 5-year and 10-year Eurobonds, respectively, due to the relatively stable macroeconomic conditions in the country.

During the month, the yields on the 10-year and 30-Year Eurobond issued in February both increased by 30 bps to 7.1 percent and 8.3 percent from 6.8 percent and 8.0 percent in April respectively.

Last week, the yields on the 10-year and 30-year Eurobonds both increased by 20 bps to 7.1 percent and 8.3 percent from 6.9 percent and 8.1 percent the previous week respectively. This can be attributed to a flight to quality as investors turned to developed market fixed income securities, as yields in developed markets continue to rise steadily.

Since the issue date, the yield on the 10-year Eurobond has declined by 0.1 percent points while the 30-year Eurobond has remained flat at 8.3 percent.

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it. (020) 528 0222 or Email: info@sokodirectory.com

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