T-Bills Drop In Subscriptions As November Melts Away

Last week, T-bills were undersubscribed, with the overall subscription rate coming in at 64.3 percent, down from 104.2 percent the previous week according to a report compiled by experts from Cytonn Investments.

The highest subscription rate was in the 91-day paper, which came in at 114.5 percent, down from 139.6 percent recorded the previous week.

The subscription for the 182-day paper declined to 63.7 percent from 65.0 percent, while that of the 365-day paper dropped to 44.7 percent from 129.3 percent recorded the previous week.

The yields on the 91-day, 182-day, and 364-day increased marginally by 2.4 bps, 4.1 bps, and 5.7 bps to 6.7, 7.2, and 8.2 percent, respectively.

The government continued to reject expensive bids with the acceptance rate declining to 87.2 percent, from 96.6 percent recorded the previous week, accepting bids worth 13.4 billion shillings out of the 15.4 billion shillings worth of bids received.

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 increased marginally by 2.4 bps to close at 6.7 percent.

The average yield of the Top 5 Money Market Funds increased by 0.1 percentage points to 10.1 percent from 10.0 percent recorded the previous week.

The yield on the Cytonn Money Market Fund remained unchanged at 10.5 percent, similar to what was recorded the previous week.

The money markets remained liquid during the week, with the average interbank rate increasing marginally by 0.5 percentage points to 3.5 percent, from the 2.9 percent recorded the previous week.

This was supported by government payments, which partly offset tax receipts. The average interbank volumes also increased by 173.2 percent to 12.8 billion shillings from 4.7 billion shillings recorded the previous week.

According to the Central Bank of Kenya’s weekly bulletin released on 27^th November 2020, commercial banks’ excess reserves stood at 6.3 billion shillings in relation to the 4.25 percent cash reserves requirement (CRR).

READ: T-Bills Oversubscribed But Lower Than The Previous Week