T-bills remained undersubscribed, with the overall subscription rate coming in at 69.6 percent, a decline from the 80.3 percent recorded the previous week due to investors’ anticipation of a Tap sale in the primary bond market in the coming week.
The 91-day paper recorded the highest subscription rate, receiving bids worth 10.1 billion shillings against the offered amount of 4.0 billion shillings, translating to a subscription rate of 252.1 percent, an increase from the 113.3 percent recorded the previous week.
The investors’ interest in the shorter-dated 91-day paper is mainly attributable to a higher return on a risk-adjusted basis.
The subscription rate for the 364-day and 182-day papers declined to 34.0 and 32.1 percent, from 52.7 and 113.3 percent recorded the previous week, respectively.
The yields on all three papers declined; with the 91-day, 182-day, and 364-day papers declining by 4.3 bps, 2.9 bps, and 7.4 bps, to 6.5, 7.0, and 7.4 percent, respectively.
The government accepted all the bids received which were worth 16.7 billion shillings, translating to an acceptance rate of 100.0 percent which was attributable to the government taking advantage of the low yields and the high liquidity in the market.
In the money markets, 3-month bank placements ended at 7.9 percent (based on what we have been offered by various banks), while the 91-day T-bill declined by 4.3 bps to 6.5 percent.
The average yield of the Top 5 Money Market Funds declined marginally by 0.1 percent points to 9.8 percent from 9.9 percent, recorded the previous week
The yield on the Cytonn Money Market (CMMF) declined marginally by 0.1 percentage points to 10.6 percent from 10.7 percent, recorded the previous week.
During the week, liquidity in the money market eased, with the average interbank rate declining to 3.6 percent from 4.2 percent recorded the previous week, due to increased liquidity from government payments, Term Auction Deposits (TADs) maturities of Kshs 104.6 bn which offset the settlements of government securities and tax remittances.
The average interbank volumes traded declined by 4.6 percent to 4.4 billion shillings, from 4.6 billion shillings recorded the previous week.
Read More: T-Bills Oversubscribed Last Week, But Lower Than Previous Week