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T-Bills Subscription Hits Their Lowest In Months During The Week

BY Juma · November 18, 2019 04:11 am

T-Bills subscriptions were at their lowest last week according to a report released by Cytonn Investments. The T-Bills had picked up and had been oscillating above 100 percent.

Last week, T-bills were undersubscribed, with the subscription rate coming in at 57.7 percent down from 132.6 percent the previous week.

The yield on the 91-day papers increased by 0.3 percentage points to 6.7 percent from 6.4 percent while the 182-day paper increased by 0.5 percentage points to 7.8 percent from 7.3 percent the previous week.

The increase in yields on the 91-day and 182-day papers can be attributed to an unexpected increase in interest rates due to the recent interest rate cap repeal. The 364-day paper, however, remained unchanged at 9.8 percent.

The acceptance rate increased to 99.9 percent from 83.5 percent recorded the previous week, with the government accepting 13.8 billion shillings of the 13.9 billion shillings bids received.

Bonds

Last week, the National Treasury announced that it will issue a 10-year 50.0 billion shillings bond (FXD 4/2019/10) with market-determined coupon rates for Budgetary Support purposes.

“The period of sale is from 6th November 2019 to 19th November 2019. As per the historical trend, we expect the market to maintain a bias towards the 10-year bond mainly driven by the perception that risks may not be adequately priced on the longer end of the yield curve, which is relatively flat due to saturation of long-term bonds.”

In the money markets, 3-month bank placements ended the week at 8.4 percent from 8.5 percent recorded in the previous week, (based on what we have been offered by various banks).

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The 91-day T-bill came in at 6.7 percent from 6.4 percent recorded the previous week, while the average of Top 5 Money Market Funds came in at 9.9 percent from 10.0 percent recorded in the previous week.

The Cytonn Money Market Fund closed the week at 10.6 percent from 10.9 percent recorded the previous week.

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it. (020) 528 0222 or Email: info@sokodirectory.com

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