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T-Bill Subscription Still In The Red, Investors Rush For 364-Day Paper

BY Soko Directory Team · February 8, 2021 08:02 am

KEY POINTS

The yields on 364-day and 182-day papers rose by 9.3 bps and 1.6 bps, to 8.7% and 7.6% while the 91-day paper declined by 2.4 bps to 6.9%

T-bills were undersubscribed last week but the overall subscription rate increased to 70.0 percent from 66.2 percent recorded the previous week.

The slight increase was attributed to the concurrent primary bond offer and the continued tightening of liquidity in the money markets.

The investors continued their preference on the 364-day paper which had the highest subscription rate increasing to 142.1 percent from 134.2 percent recorded the previous week.

This is mainly attributable to investor preference on medium-term papers (1-2 years) as they now believe that the pandemic has been contained but are still worried about the possible effects of the current rising political temperatures preceding the elections in August 2022.

The subscription for the 182-day paper also increased to 20.9 percent, from 19.7 percent recorded the previous week, while the 91-day paper declined marginally to 12.6 percent, from 12.7 percent recorded the previous week.

The yields on 364-day and 182-day papers rose by 9.3 bps and 1.6 bps, to 8.7 and 7.6 percent while the 91-day paper declined by 2.4 bps to 6.9 percent.

The government received bids worth 16.8 billion shillings, accepting only 14.9 billion shillings translating to an acceptance rate of 88.6 percent.

The Central Bank of Kenya re-opened two bonds, FXD1/2013/15 and FXD1/2012/20, with effective tenors of 7.1 years and 11.8 years, and coupons of 11.3 and 12.0 percent respectively.

The issue recorded an overall subscription rate of 83.7 percent, mainly attributable to the short bidding period and tightened liquidity in the market.

READ: T-Bill Subscription For 364-Day Paper Hits 115.9% In January

The government received bids worth 41.9 billion shillings, lower than the 50.0 billion shillings offered, and accepted only 32.1 billion shillings, translating to an acceptance rate of 76.7 percent.

The weighted average rate of accepted bids was 11.9 percent and 12.7 percent, for the FXD1/2013/15 and FXD1/2012/20, respectively.

For money markets, 3-month bank placements ended the week at 7.4 percent, while the yield on the 91-day T-bill declined by 2.4 bps to 6.9 percent.

The average yield of the Top 5 Money Market Funds remained unchanged at 10.0 percent from last 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-Bill Subscription Improves But Still Under 100%

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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