T-Bills Bounce Back To Oversubscription After Weeks Of Under

The T-Bills have bounced back into a subscription of being under for the past two weeks according to a weekly report released by Cytonn Investments Limited.

Last week, T-bills were oversubscribed, with the overall subscription rate rising to 103.7 percent from 78.6 percent recorded the previous week.

The oversubscription is partly attributable to favorable liquidity in the money market following the end of the previous month’s Cash Reserve Requirement (CRR Cycle) on 14^th September.

The yields on all the papers were on the rise, with the 91-day, 182-day, and 364-day papers rising by 5.3 bps, 0.7 bps, and 12.3 bps to 6.4, 7.2 and 9.7 percent respectively.

The acceptance rate also rose to 85.4 percent from 77.3 percent recorded the previous week, with the government accepting 21.3 billion shillings out of the 24.9 billion shillings worth of bids received.

For the month of September, the Kenyan Government re-opened two 15-year bonds, (FXD 1/2018/15) and (FXD 2/2019/15) in a bid to raise a total of 50.0 billion shillings for budgetary support.

The issue was undersubscribed recording a subscription rate of 65.3 percent with the government receiving bids totaling to 32.6 billion against the 50.0 billion shillings on offer.

The government accepted yield of 12.6 percent and 12.7 percent for the FXD 1/2018/15 and FXD 2/2019/15, respectively.

The acceptance rate came in at 100.0 percent with the government accepting the entire 32.6 billion shillings worth of bids received.

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 6.4 percent, while the average of Top 5 Money Market Funds came in at 10.0 percent unchanged from the previous week.

The Cytonn Money Market Fund closing the week at 11.0 percent from 10.9 percent the previous week.

NOTE:

When the subscription rate of T-Bills is above 100 percent, it is said to be “oversubscribed” and when it is under 100 percent, it is said to be “undersubscribed.”