T-Bills At It Again: They Seem To Be In The Red To Stay

T-Bills seem to have decided to stay in the red for the rest of 2019 according to the stats compiled by Cytonn Investments.

Last week, T-bills continued to be undersubscribed, with the subscription rate coming in at 55.3 percent up from 34.8 percent the previous week.

The continuous under subscription was attributable to reduced parastatal participation, following the directive by treasury ordering state departments to surrender surplus, as well as reduced participation by banks following the repeal of the interest rate cap, and are now looking to lend to the private sector.

The yield on the 91-day, 182-day, and 364-day papers remained unchanged at 7.1, 8.2 and 9.8 percent respectively.

The acceptance rate dropped to 44.7 percent from 59.7 percent recorded the previous week, with the government accepting 5.9 billion shillings of the 13.3 billion shillings worth of bids received.

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

The 91-day T-bill came in at 7.1 percent while the average of Top 5 Money Market Funds came in at 9.9 percent unchanged from the previous week.

The Cytonn Money Market Fund, increased by 0.1 percentage points to close the week at 10.7 percent from 10.6 percent recorded in the previous week.

Also Read:

• T-Bills Cross Into December On A Gloomy Note
• T-Bills Continue To Wobble As The Month Nears The End

Liquidity:

During the week, the average interbank rate increased to 6.3 percent from 4.7 percent recorded the previous week, pointing to tightening of liquidity in the money markets, attributable to tax payments with Pay As You Earn (PAYE) due on 9^th December 2019.

This saw commercial banks excess reserves come in at Kshs 10.6 bn in relation to the 5.25 percent cash reserves requirement (CRR).

The average interbank volumes decreased by 0.8 percent to 23.6 billion shillings from 23.8 billion shillings recorded the previous week.

Kenyan Eurobonds

According to Reuters, the yield on the 10-year Eurobond issued in June 2014, remained unchanged at 5.3 percent as recorded in the previous week.

During the week, the yields on the 10-year Eurobond and 30-year Eurobond both increased by 0.1 percentage points to 6.6 percent and 8.1 percent from 6.5 and 8.0 percent respectively.