T-Bills remained oversubscribed last week according to a weekly report released by Cytonn Investments Limited.
The subscription rate came in at 236.7 percent last week from 130.6 percent the previous week.
Note: For any T-Bill Subscription that is above 100 percent, it is termed as an “oversubscription” while any subscription that is below 100 percent is termed as an “under-subscription.”
According to analysts from Cytonn, the sustained oversubscription of T-Bills was as a result favourable liquidity in the market supported by government payments.
Yields
The yields on the 91-day and the 182-day T-Bills declined by 0.1 percentage points to 6.8 percent and 7.6 percent respectively.
The yields on the 364-day T-bills declined by 0.2 percentage points to 9.1 percent from 6.9, 7.7 and 9.3 percent for the 91-day, 182-day and 364-day T-bills respectively recorded in the previous week.
The acceptance rate declined to 17.4 percent from 35.1 percent recorded the previous week.
The government accepted a total of 9.9 billion shillings of the 56.8 billion shillings worth of bids received, lower than the weekly quantum of 24.0 billion shillings.
Investors’ participation remained skewed towards the longer-dated paper, with the continued demand being attributable to the scarcity of newer short-term bonds in the primary market.
The subscriptions for the 91-day, 182-day and 364-day T-bills rose to 161.2, 64.0, and 439.7 percent from 26.1, 28.5, and 274.2 percent respectively.
The money markets
In the money markets, 3-month bank placements ended the week at 8.8 percent (based on what we have been offered by various banks), 91-day T-bill at 6.8 percent, average of Top 10 Money Market Funds at 8.4 percent, with the Cytonn Money Market Fund closing the week at 11.0 percent.
The week ahead
As the week kicks off, analysts say T-Bill Subscription is likely to remain oversubscribed banking on favourable liquidity that is likely to be witnessed as a result of government payments to banks.