T-bills were oversubscribed last week, with the overall subscription rate coming in at 123.9 percent a decline from 181.1 percent recorded the previous week.
The yields on the 91-day and 364-day papers remained unchanged at 7.6 percent and 9.7 percent respectively, while the yield on the 182-day paper declined by 10 bps to 8.7 percent from 8.8 percent the previous week.
The acceptance rate for T-bills improved to 95.8 percent from 59.8 percent the previous week, with the government accepting 28.5 billion shillings of the 29.7 billion shillings worth of bids received.
The subscription rate for the 91-day, 182-day, and 364-day papers declined to 143.5, 111.6 and 128.3 percent from 182.9, 170.9 and 190.7 percent recorded the previous week, respectively.
For the month of September, the Kenyan Government re-opened 2 bonds, FXD 1/2018/10 and FXD 2/2018/20, with 10-years and 19.9-years to maturity, and coupon rates of 12.7 percent and 13.2 percent respectively in a bid to raise 40.0 billion shillings for budgetary support.
The issue was under-subscribed at an overall subscription rate of 81.2 percent, while the weighted average rate of accepted bids came in at 12.7 percent and 12.9 percent for the 10-year and 20-year bonds, respectively.
Cytonn had earlier predicted the subscription rate of 12.5-12.7 percent for the FXD 1/2018/10, and 12.8-13.1 percent for the FXD 2/2018/20.
The government accepted 26.6 billion shillings out of the 32.5 billion shillings worth of bids received, translating to an acceptance rate of 81.8 percent.
The 10-year bond had a subscription rate of 55.3 percent while the 20-year bond recorded poor performance with the subscription rate coming in at 25.8 percent which we attribute to the relatively flat yield curve on the long-end as compared to the relatively steep short-end of the yield curve, making it unattractive to hold longer-term bonds.