T-Bills End The Week At 131.6% From 110.0% Previously

Last week, T-bills were oversubscribed, with the overall subscription rate coming in at 131.6 percent, up from 110.0 percent the previous week.

According to Cytonn Investments, the oversubscription was supported by the favorable liquidity conditions in the money markets.

The highest subscription rate was in the 91-day paper, which came in at 215.2 percent, up from 186.5 percent recorded the previous week.

The subscription for the 182-day paper increased to 71.0 percent from 39.3 percent while that of the 365-day paper rose to 158.9percent from 150.1 percent recorded the previous week.

The yields on the 91-day, 182-day, and 364-day papers remained unchanged at 6.5, 6.9, and 7.8 percent, respectively.

The acceptance rate increased to 94.9 percent, from 93.9 percent recorded the previous week, with the government accepting bids worth 30.0 billion shillings out of the 31.6 billion shillings worth of bids received.

There was a high demand for this month’s bond offers, with the overall subscription rate for the two bonds coming in at 138.3 percent, partly supported by the favorable liquidity in the market, and financial institutions bias towards the fixed income market in this period of economic uncertainty.

The Central Bank of Kenya had re-opened 2 bonds the FXD1/2011/20 and FXD1/2018/25 with coupons of 10.0 and 13.4 percent and effective tenors of 10.6 years and 22.7 years, respectively.

The government received bids worth 69.1 billion shillings, higher than the 50.0 billion shillings offered, and accepted only 60 billion shillings.

Investors preferred the longer-term paper i.e. FXD1/2018/25, which received bids worth 46.0 billion shillings, representing 66.5 percent of the total bids received.

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The weighted average rate of accepted bids for the two bonds came in at 12.0 and 13.5 percent, for FXD1/2011/20 and FXD1/2018/25, respectively.

The government rejected high bids only accepting 60.0 billion shillings out of the 69.1 billion shillings worth of bids received, translating to an acceptance rate of 86.8 percent.

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).

The yield on the 91-day remained unchanged at 6.5 percent per annum. The average yield of the Top 5 Money Market Funds decreased by 0.2 percentage points to 9.9 percent from 10.1 percent recorded the previous week.

The yield on the Cytonn Money Market decreased by 0.3 percent points to close at 10.6 percent, from the 10.9 percent recorded the previous week.

READ: T-Bills Subscription Move Past 100% After Days In The Red