Time For T-Bills To Shine? Subscription Rate Hits 290.5%

Last week, T-bills remained oversubscribed, with the subscription rate coming in at 290.5 percent, up from 209.1 percent the previous week.

The oversubscription was partly attributable to the favorable liquidity in the money markets as evidenced by the average interbank rate declining to 2.6 percent from 3.1 percent, recorded the previous week, as well as the continued preference for shorter-dated papers by investors.

The subscription rates for the 91-day, 182-day, and 364-day papers all increased to 294.0, 265.0, and 314.7 percent respectively, from 255.6, 213.0, and 186.5 percent recorded the previous week.

The yields on the 91-day, 182-day, and 364-day papers declined marginally by 6.6 bps, 14.2 bps, and 13.5 bps to 7.3, 8.1, and 9.0 percent respectively.

The acceptance rate declined to 32.8 percent from 35.4 percent recorded the previous week, with the government accepting only 22.9 billion shillings of the 69.7 billion shillings worth of bids received.

In the money markets, 3-month bank placements ended the week at 7.5 percent (based on what Cytonn has been offered by various banks).

The yield on the 91-day T-bill declined marginally by 6.6 bps to close the week at 7.3 percent similar to what was recorded the previous week.

The average yield of Top 5 Money Market Funds declined marginally to 9.9 percent from the 10.0 percent recorded the previous week.

The yield on the Cytonn Money Market declined by 0.1 percentage points to close the week at 10.6 percent from 10.7 percent recorded the previous week.

Last week and the previous week have seen the performance of T-Bills blooming with the subscription coming in above 200 percent even as Covid-19 continues to bite.

Will they fall back to under-subscription like before?

The Covid-19 Update

On Sunday, Kenya recorded 137 more positive coronavirus cases in 24 hours, bringing the national tally to 3,594.

Speaking in Nyeri during the daily briefings on the pandemic, Health Cabinet Secretary Mutahi Kagwe said 3,167 samples had been tested. He urged Kenyans to follow the government’s Covid-19 protocols to reduce the spread of the virus.

READ: T-Bill Subscription Hits 200 Percent For The First Time In Days