91-Day Paper Subscription Up To 948.1% As T-Bills Bloom

Last week, T-bills remained oversubscribed, with the subscription rate coming in at 358.2 percent up from 317.4 percent the previous week.

The highest subscription rate was on the 91-day paper which rose to 948.1 percent from 511.3 percent recorded the previous week.

The subscription for the 182-day paper also increased to 273.7 percent from 267.5 percent recorded the previous week, while the subscription of the 364-day paper declined to 206.7 percent from 289.8 percent recorded the previous week.

The oversubscription is partly attributable to increased liquidity in the money market with the average interbank rate coming in at 1.9 percent from 3.0 percent recorded the previous week and the interbank volumes declining to 3.8 billion shillings from 4.1 billion shillings the previous week.

Liquidity was mainly supported by government payments and maturing TADs of 125.4 billion shillings.

Banks continue to prefer government securities as opposed to lending as their holdings in bills and bonds increased to 54.9 percent from 53.3 percent recorded the previous week.

The yields on the 91-day, 182-day, and 364-day papers declined by 27.2 bps, 28.9 bps, and 6.9 bps respectively to 6.3, 6.8, and 7.7 percent respectively.

The acceptance rate declined to 53.8 percent, from 57.6 percent recorded the previous week, with the government accepting 46.2 billion shillings of the 86.0 billion shillings worth of bids received, higher than the weekly offered amount of 24.0 billion shillings.

In the money markets, 3-month bank placements ended the week at 7.5 percent (based on what we have been offered by various banks), while the yield on the 91-day T-bill declined by 0.3 percentage points to close the week at 6.3 percent, from 6.5 percent recorded the previous week.

The average yield of Top 5 Money Market Funds remained unchanged at 9.9 percent similar to what was recorded the previous week.

The yield on the Cytonn Money Market declined by 0.1 percentage points to close at 10.5 percent from 10.6 percent recorded the previous week.

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