T-Bill Subscription For The Week Falls Again

T-Bills subscription for the week fell again for the second week running according to the weekly report released by Cytonn Investments.

For the week ending Friday, the overall subscription came in at 71.6 percent, a drop from 86.8 percent a week before.

The yields on the 91 and 364-day papers remained unchanged at 6.4 and 9.2 percent respectively.

The yield on the 182-day paper fell by 0.1 percentage points to 7.0 from 7.1 percent the previous week.

The acceptance rate for all the treasury bills decreased to 89.2 from 99.6 percent the previous week.

The government of Kenya accepted 15.3 billion shillings of the 17.2 billion shillings worth of bids received.

The acceptance rate was lower than the weekly quantum of 24 billion shillings.

According to Cytonn Investments, the 91-day paper registered an improved subscription to 129.5 from 68.8 percent the previous week.

Both the 182 and 364-day papers recorded a downturn in subscription to 12.3 and 107 percent from 29.4 and 151.5 percent the previous week.

Government Bonds

The Government is set to re-open two 15-year bonds (FXD 1/2018/15) and (FXD 2/2019/15) for the month of September.

From the two bonds, the government, through the National Treasury hopes to raise 50 billion shillings for budgetary support.

The government has already issued two medium-tenor bonds in an effort to plug in the budget deficit.

The government is also trying to use the tenors to reduce the maturity risk profile of government debt.

“We expect the bonds to be oversubscribed as per recent trends, mainly driven by the perception that risks may not be adequately priced on the longer end of the yield curve,” said analysts from Cytonn Investments.

“The yield curve is relatively flat due to saturation of long-term bonds, which has resulted in a lot of interest in the short and medium term bonds,” they added.

The Money Markets

In the money markets, 3-month bank placements remained unchanged, ending the week at 8.6 percent.

The 91-day T-Bill also ended the week unchanged at 6.4 percent.

The average of top 5 Money Market Funds ended the week at 9.5 percent compared to 9.6 percent the previous week.

Cytonn Money Market Fund closed the week at 11.0 percent from 11.1 percent the previous week.