T-bills were oversubscribed, with the overall subscription rate coming in at 126.6 percent, up from 115.9 percent the previous week.
The oversubscription was driven by the high liquidity in the money markets as evidenced by the 7.9 percent increase in interbank volumes to 8.2 billion shillings during the week, from 7.6 billion shillings recorded the previous week.
The highest subscription rate was in the 91-day paper which came in at 220.3, up from 56.9 percent recorded the previous week.
The subscription rate for the 364-day paper dropped to 135.4 percent from 210.0 percent, while that of the 182-day paper increased to 80.3 percent from 45.5 percent recorded the previous week.
The yields on all three papers, 91-day, 182-day, and 364-day increased marginally by 1.0 bps, 4.0 bps, and 5.0 bps to 6.7, 7.1, and 8.0 percent respectively.
The acceptance rate declined to 97.7 percent from 99.2 percent recorded the previous week, with the government accepting bids worth 29.7 billion shillings out of the 30.4 billion shillings worth of bids received.
Additionally, there was low demand for this month’s tap sale for the 25-year bond, FXD1/2018/25, with the overall subscription rate coming in at 39.8 percent.
Investors seemed to prefer shorter-dated papers as evidenced by the high subscription rate of this week’s treasury bills of 126.6 percent.
The government accepted 7.9 billion shillings out of the 8.0 billion shillings worth of bids received, representing an acceptance rate of 99.3 percent, which can be attributed to the undersubscription.
The allocated average rate for accepted bids was 13.5 percent while the coupon rate for the bond is 13.4 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), while the yield on the 91-day increased marginally by 0.01 percentage points 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.
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