T-Bills Swim Above 200% In The Wake Of Confirmed Coronavirus Case

During the week, T-bills remained oversubscribed, with the subscription rate coming in at 264.0 percent, up from 195.1 percent the previous week.

The oversubscription, according to Cytonn Investments, was partly attributable to the continued favorable liquidity in the money market supported by government disbursements and local debt maturities.

The recent Coronavirus outbreak has also seen increased demand for fixed-income securities, as investors move away from the equities market.

“We note the continued demand for the 364-day paper, having recorded the highest subscription rate, coming in at 460.4 percent which we attribute to investors having a bias towards shorter-dated papers to avoid duration risk coupled with the flight from the equities market seen during the week,” said Cytonn.

The yield on the 91-day paper remained unchanged at 7.3 percent while the yield on the 182-day and 364-day papers declined by 0.1 percentage point and 0.2 percentage points, to 8.1 and 9.1 percent respectively, from the 8.2 and 9.3 percent recorded the previous week.

The acceptance rate declined to 35.6 percent from 46.0 percent recorded the previous week, with the government accepting 22.5 billion shillings of the 63.4 billion shillings bids received.

In the money markets, 3-month bank placements ended the week at 8.0 percent (based on what we have been offered by various banks)

The 91-day T-bill remained unchanged at 7.3 percent while the average of Top 5 Money Market Funds came in at 10.1 percent down from 10.2 percent recorded the previous week.

The yield on the Cytonn Money Market came in at 11.0 percent, unchanged from the previous week – you can invest and withdraw instantly, 24/7 by just dialing *809#.

During the week, liquidity in the money markets remained favorable, while only declining marginally, as evidenced by a rise in the average interbank rate to 4.2 percent from 4.0 percent recorded the previous week, attributed to banks trading cautiously in the interbank market in order to meet their CRR requirements for the cycle ending on 14^th March.

Commercial banks’ excess reserves came in at Kshs 15.9 bn in relation to the 5.25 percent cash reserves requirement (CRR). The average interbank volumes declined by 27.2 percent to 4.2 billion shillings from 5.7 billion shillings recorded the previous week.

READ: T-Bills Dominate Week 1 Of March With An Oversubscription