T-Bills Back Into The Red As October Moves Towards The End

Last week, T-bills were undersubscribed, with the overall subscription rate coming in at 81.4 percent down from 131.6 percent the previous week.

The highest subscription rate was in the 91-day paper, which came in at 103.1 percent down from 215.2 percent recorded the previous week.

The subscription for the 182-day paper increased to 72.3 percent from 71.0 percent while that of the 365-day paper dropped to 81.7 percent from 158.9 percent recorded the previous week.

The yields on the 91-day and 182-day increased to 6.6 percent and 7.0 percent respectively, from 6.5 and 6.9 percent last week while the 364-day papers remained unchanged at 7.8 percent.

The acceptance rate increased to 97.4 percent from 94.9 percent recorded the previous week, with the government accepting bids worth 19.0 billion shillings out of the 19.5 billion shillings worth of bids received.

In the money markets, 3-month bank placements ended the week at 7.2 percent (based on what we have been offered by various banks), while the yield on the 91-day increased to 6.6 from 6.5 percent recorded the previous week.

The average yield of the Top 5 Money Market Funds remained constant at 9.9 percent as recorded the previous week. The yield on the Cytonn Money Market remained constant at 10.6 percent as recorded the previous week.

Liquidity

The money markets were relatively liquid during the week, with the average interbank rate increasing marginally to 2.5 percent, from the 2.4 percent recorded the previous week. This was supported by government payments, which partly offset tax receipts.

The average interbank volumes increased to Kshs 17.9 bn from Kshs 8.0 bn, as recorded the previous week. According to the Central Bank of Kenya’s weekly bulletin, commercial banks’ excess reserves came in at Kshs 18.5 bn in relation to the 4.25 percent Cash Reserve Ratio.

Kenya Eurobonds:

During the week, the yields on all Eurobonds decreased with the yield on the 10-year Eurobond issued in June 2014 decreasing by 0.2 percentage points to 5.5 percent, from 5.7 percent recorded the previous week.

The yields on the 10-year and 30-year Eurobonds both decreased by 0.2 and 0.1 percentage points to close at 6.9 percent and 8.4 percent, from 7.1 and 8.5 percent recorded the previous week.

The yields on the 2019 dual-tranche Eurobond issue decreased with the 7-year decreasing to 6.5 percent from 6.7 percent the previous week. The 12-year Eurobond also decreased by 0.2 percentage points to 7.6 percent from the 7.8 percent recorded the previous week.

READ: T-Bills In The Red For Three Weeks Running: Any Hope?