The total amount raised from M-Akiba bonds since its first issuance in 2017 has hit 1 billion shillings according to the stats released by the National Treasury.
The M-Akiba was re-opened for the third time in August with a target of raising 500 million shillings from the initial 250 million shillings.
The third subscription, however, veered off the target as it came in at 263 million shillings from the expected 500 million shillings, meeting 52.6 percent of the target.
The overall subscription for M-Akiba since its issuance now stands at 52.6 percent with efforts to increase its subscription being made through creating public awareness.
The M-Akiba initiative sought to leverage on the increased mobile phone penetration to deepen financial inclusion with its terms being favorable to retail investors with the minimum subscription set at 3,000 shillings compared to the other infrastructure bonds, whose minimum subscription amount is set at 100,000.
The M-Akiba bond offers an interest rate of 10.0 percent that is tax-free, currently with a tenor of 1 year with the maturity date set at 7th September 2020 and is thus trading at a discount compared to a 364-day T-bill which has a similar tenor to maturity that currently trading at a yield of 9.6 percent.
In the money markets, 3-month bank placements ended the week at 8.6 percent (based on what we have been offered by various banks), the 91-day T-bill came in at 6.3 percent, while the average of Top 5 Money Market Funds came in at 10.0 percent, compared to 10.1 percent last week
The Cytonn Money Market Fund closing the week at 10.9 percent, a decline from 11.0 percent last week.
During the week, the average interbank rate increased to 6.4 percent, from 5.5 percent recorded the previous week, pointing to tightened liquidity conditions in the money market attributable to tax payments with Pay as You Earn (PAYE) having been due as at the start of the week on 9th September, and banks trading cautiously in the interbank market in order to meet their CRR requirements for the cycle ending August 14th.
This saw commercial banks’ excess reserves decline to come in at Kshs 4.1 bn in relation to the 5.25 percent cash reserves requirement (CRR), from Kshs 6.6 bn the previous week. The average volumes traded in the interbank market increased by 35.8 percent to Kshs 10.1 bn, from 7.4 billion shillings the previous week.