Yield On Kenyan Eurobonds Dip As Investor Confidence Returns

President Uhuru Kenyatta announced the easing of Covid-19 restrictions including lifting the cessation of movements in and out of the country and experts say the “economy is responding well.”

Analysts from Cytonn Investments say that the decision by the Son of Jomo is “slowly restoring the confidence of investors” as witnessed in the performance of Eurobonds for the month of August.

“In August, the yields on the Kenyan Eurobonds adopted a declining trend, pointing to improved investor sentiments supported by the confidence following the easing of movement restrictions in the country,” said Cytonn Investments in the August report.

According to Reuters, the yield on the 10-year Eurobond issued in June 2014 declined by 0.4 percentage points to 6.0 percent in August from 6.4 percent in July. The same bond, during the first week of September, declined by 0.6 percentage points from 6.0 percent to 5.4 percent.

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Another 10-year bond issued in February 2018 declined by 0.4 percent in August 2019 from 7.5 percent to 7.1 percent. The 30-year bond issued in the same period declined by 0.2 percentage points from 8.4 percent to 8.2 percent.

During the week, the yield on the 10-year Eurobond issued in February 2018 declined by 0.4 percentage points to end the week at 6.7 percent from 7.1 percent recorded at the end of the previous week.

During the month of August too, the newly issued dual-tranche Eurobond declined by 0.4 percentage points from 7.4 percent to 7.0 percent. The 12-year Eurobond also declined by 0.6 percentage points to 7.6 percent from 8.2 percent recorded at the end of the month of July.

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