T-Bill Subscription Rejuvenates To 131.4% Last Week

T-bills were oversubscribed during the week with the overall subscription rate increasing to 131.4 percent from 92.3 percent recorded the previous week.

The improved subscription was attributable to improved liquidity in the market supported by government payments.

The yields on the 91-day and 182-day papers declined by 7.5 bps and 7.6 bps to 7.1 and 7.7 percent from 7.2 and 7.8 percent respectively.

The yield on the 364-day paper remained unchanged at 9.3 percent.

The acceptance rate rose to 91.9 percent from 75.0 percent recorded the previous week, with the government accepting a total of 29.0 billion shillings of the 31.5 billion shillings worth of bids received, higher than the weekly quantum of 24.0 billion shillings.

Investors’ participation remained skewed towards the longer-dated paper, with the 364-day recording improved subscription to 210.5 percent from 193.0 percent the previous week.

The subscription rates for the 91-day and 182-day papers rose to 146.1 percent and 46.4 percent, from 49.8 percent and 8.0 percent recorded the previous week, respectively.

Interbank Rate

During the week, the average interbank rate declined to 5.4 percent from 5.7 percent recorded the previous week, pointing to improved liquidity conditions in the money market, supported by government payments.

The average volumes traded in the interbank market declined by 14.6 percent to 17.0 billion shillings from 20.0 billion shillings the previous week.

Kenya Eurobonds:

According to Reuters, the yield on the 10-year Eurobond issued in 2014 declined by 0.1 percent points to 6.3 percent from 6.4 percent the previous week.

The yield on the 5-year declined by 0.3 percentage points to 5.4 percent, from 5.7 percent the previous week. Key to note is that these bonds have 1.0-month and 5.1-years to maturity for the 5-year and 10-year, respectively.

For the February 2018 Eurobond issue, yields on the 10-year Eurobond remained unchanged at 7.5 percent while the yield on the 30-year Eurobond rose by 0.1 percentage points to 8.6 percent from 8.5 percent the previous week.

Since the issue date, the yields on both the 10-year Eurobond has increased by 0.1 percent points while the yields on the 30-year Eurobond has increased by 0.2 percent points.

The newly issued dual-tranche Eurobond with 7-Years and 12-years tenor, priced at 7.0 percent for the 7-year tenor and 8.0 percent for the 12-year tenor, respectively, started trading on 17^th May 2019. The yield on the 7- year bond and 12-year bonds have risen by 0.1 percent point and 0.2 percent points to 7.1 percent and 8.1 percent, from 7.0 percent and 7.9 percent, respectively, as at the close of 17^th May 2019.