T-Bills’ Subscription Drops To 46.0% In Last Week’s Sessions

By Soko Directory Team / Published December 10, 2018 | 5:25 am

T-bills were under-subscribed last week, with the overall subscription rate coming in at 46.0 percent down from 94.7 percent recorded the previous week.

The under-subscription was attributable to the tight liquidity in the inter-bank markets evidenced by the rise in the inter-bank rate, which recorded a high of 8.2 percent as at 7^th December 2018, the highest since August 2018, with the average interbank rate for the week coming in at 7.5 percent, up from 5.9 percent recorded the previous week.

The subscription rate for the 91-day and 182-day papers declined to 172.8 percent and 9.9 percent from 269.8 percent and 48.2 percent recorded the previous week respectively.

Subscription rate for the 364-day paper however improved to 31.5 percent from 26.1 percent recorded the previous week.

The yields on the 91-day, 182-day, and 364-day remained unchanged at 7.3, 8.2 and 9.6 percent. The acceptance rate rose to 96.2 percent from 94.7 percent recorded the previous week, with the government accepting 10.6 billion shillings of the 11.0 billion shillings worth of bids received.

For the month of December, the Kenyan Government has issued a new bond; issue no FXD 2/2018/10, with 10.0-years to maturity, and a market-determined coupon rate.

The government will be seeking to raise 40.0 billion shillings for budgetary support. The issuing of the medium and long-term bonds are in a bid to lengthen the average time to maturity for the Kenyan Government’s debt portfolio and mitigate the potential rollover risks. The issuance of medium to long-term securities has however continued to have a lackluster performance, which we attribute to the saturation of long end offers, with the last relatively shorter paper with a 5-year tenor having been offered in March, leading to a relatively flat yield curve on the long-end.

The period of sale is from 04/12/2018 to 11/12/2018. Given that the Treasury bonds with the same tenor are currently trading at a yield of 12.4 percent, analysts from Cytonn Investments expect bids to come in at between 12.4 percent and 12.6 percent.

About Soko Directory Team

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