T-bills remained undersubscribed during the week according to the stats compiled by Cytonn Investments in their second report this year.
The overall subscription of the T-Bills came in at 65.7 percent, an increase from the 21.6 percent recorded the previous week.
This can be attributed to the concurrent primary bond issue where the government issued a 2-year bond, FXD1/2021/002, which recorded a higher overall subscription rate of 244.6 percent.
The continued tightening of liquidity in the money markets, evidenced by 0.2 percentage points increase in the average interbank rate to 6.2 percent, from 6.0 percent recorded last week also played a role.
The highest subscription rate was in the 364-day paper, which rose to 100.2 percent, from 39.5 percent recorded the previous week.
The subscription for both the 182-day and 91-day papers rose to 50.0 and 18.7 percent, from 5.7 and 16.7 percent recorded the previous week, respectively.
The yields on the 91-day and 182-day papers rose by 11.0 bps and 79.0 bps to 6.9 and 7.5 percent respectively, while the 364-day paper declined by 15.0 bps to 8.4 percent.
The government continued to reject expensive bids with the acceptance rate declining to 87.8%, from 100.0% recorded the previous week, accepting bids worth 13.8 billion shillings out of the 15.8 billion shillings worth of bids received.
There was a high demand for this month’s Primary bond offer, with the overall subscription rate coming in at 244.6 percent, partly supported by investor preference for shorter-dated papers in this period of economic uncertainty.
The Central Bank of Kenya issued a bond, FXD1/2021/002, with an effective tenor of 2 years and a coupon of 9.5 percent.
The government received bids worth Kshs 61.1 bn, higher than the 25.0 billion shillings offered, and accepted only 55.9 billion shillings, translating to an acceptance rate of 91.3 percent, with the weighted average rate of accepted bids coming in at 9.5 percent.
In the money markets, 3-month bank placements ended the week at 7.4 percent, while the yield on the 91-day T-bill increased by 11.0 bps to 6.9 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 to 10.8 percent, from the 10.7 percent recorded the previous week.