T-Bill Subscription Improves But Still Under 100%

According to the stats compiled by Cytonn Investments, the subscription of the Treasury Bills improved as compared to the previous week but still below the recommended 100 percent.

Last week saw the T-bills subscription rate improving with the overall subscription rate coming in at 84.5 percent, from 65.7 percent recorded the previous week.

The highest subscription rate was in the 364-day paper which rose to 172.2 percent from 133.1 percent recorded the previous week.

The subscription for the 182-day and 91-day papers however declined to 9.2 and 53.7 percent, from 81.0percent and 125.4 percent recorded the previous week, respectively.

The yields on the 91-day and 364-day papers both rose by 10.0 bps and 6.0 bps to 7.0 and 8.5 percent, respectively, while the 182-day paper remained unchanged at 7.5 percent.

The government continued to reject expensive bids with the acceptance rate declining to 86.4 percent, from 99.9 percent recorded the previous week, accepting bids worth 17.5 billion shillings out of the 20.3 billion shillings worth of bids received.

The Bond

The Central Bank of Kenya issued a bond, IFB1/2021/016, with an effective tenor of 16 years and a coupon of 12.3 percent, which traded from 21^st December 2020 to 19^th January 2021.

The issue recorded high demand, with the overall subscription rate coming in at 250.7 percent, supported by the attractive tax-free nature of the infrastructure bond.

The government received bids worth 125.3 billion shillings, higher than the 50.0 billion shillings offered, and accepted only 81.1 billion shillings. The acceptance rate came in at 64.7 percent, with the weighted average rate of accepted bids being 12.4 percent.

In the money markets, 3-month bank placements ended the week at 7.4 percent (based on what we have been offered by various banks), while the yield on the 91-day T-bill increased by 10.0 bps to 7.0 percent.

The average yield of Top 5 Money Market Funds remained unchanged at 10.0 percent, as recorded the previous week. The yield on the Cytonn Money Market increased marginally by 10.0 bps to 10.9 percent from the 10.8 percent, recorded the previous week.

READ: T-Bills Remain Undersubscribed As Festivities Continue