T-Bills Subscription At 110% During The Week

T-bills were oversubscribed, with the overall subscription rate coming in at 110.7 percent, down from 131.0 percent recorded the previous week.

The demand for the 364-day paper remained high, as it recorded the highest bids worth 22.3 billion shillings against the 10.0 billion shillings offered, translating to a subscription rate of 222.6 percent, a decline from the 253.2 percent recorded the previous week.

Investors’ continued interest in the 364-day paper is mainly attributable to the expectations of continued progress in the containment of COVID-19 through the vaccine inoculation, as well as the paper’s attractive rate of 9.4 percent which is higher than the rate for most bank placements.

The subscription rate for the 182-day paper declined to 28.9 percent, from 42.6 percent recorded the previous week, receiving bids worth 2.9 billion shillings against the 10.0 billion shillings offered.

The subscription rate for the 91-day paper also declined to 35.7 percent, from 46.5 percent recorded the previous week, with the paper receiving bids worth Kshs 1.4 bn against the offered amounts of Kshs 4.0 bn.

The yields on the 91-day and 182-day papers increased by 4.0 bps and 5.0 bps to 7.2 and 8.0 percent, respectively, while the yields on the 364-day paper declined by 5.9 bps to 9.4 percent.

The government continued to reject expensive bids, accepting Kshs 20.5 bn out of the Kshs 26.6 bn worth of bids received, translating to an acceptance rate of 77.0 percent.

In the Primary Bond Market, the government opened a tap sale on the two bonds issued in the month of May, FXD2/2019/15 and FXD1/2021/25.

The tap sale issuance recorded an overall subscription rate of 104.7 percent with investors preferring the shorter paper, FXD2/2019/15, which received bids worth Kshs 15.9 bn, of the Kshs 20.0 bn offered, translating to a subscription rate of 79.5 percent.

On the other hand, FXD1/2021/25 received bids worth Kshs 5.0 bn against the Kshs 20.0 bn offered, translating to a subscription rate of 25.2 percent.

The average yields on the two bonds were 13.0 and 13.9 percent for FXD2/2019/15 and FXD1/2021/25, respectively. The government accepted Kshs 20.7 bn of the Kshs 20.9 bn worth of bids received, translating to an acceptance rate of 98.9 percent.