T-Bills Subscription Drops To 80.3% On Account Of Bond Issue

KEY POINTS
T-bills were undersubscribed, with the overall subscription rate coming in at 80.3 percent, a decline from the 146.0 percent recorded the previous week attributable to the concurrent primary bonds issue.
T-bills were undersubscribed, with the overall subscription rate coming in at 80.3 percent, a decline from the 146.0 percent recorded the previous week attributable to the concurrent primary bonds issue.
The 182-day paper recorded the highest subscription rate, receiving bids worth 11.3 billion shillings against the offered amount of 10.0 billion shillings, translating to a subscription rate of 113.3 percent, a decline from the 194.1 percent recorded the previous week.
The subscription rate for the 364-day paper increased to 52.7 percent, from 43.2 percent recorded the previous week, while the subscription rate for the 91-day paper declining to 66.8 percent, from 282.7 percent recorded the previous week.
The yields on all three papers declined; with the 91-day, 182-day, and 364-day paper declining by 9.4 bps, 11.7 bps, and 7.0 bps, to 6.5, 7.0, and 7.5 percent respectively.
The government continued to reject expensive bids, accepting 19.2 billion shillings out of the 19.3 billion shillings worth of bids received, translating to an acceptance rate of 99.6 percent.
In the Primary Bond Market, the three bonds reopened by the government for the month of July recorded an oversubscription of 194.9 percent attributable to the high liquidity in the market during the duration of the bond sale.
The government sought to raise 60.0 billion shillings in the three-tranche bond and accepted 79.9 billion shillings out of the 116.9 billion shillings worth of bids received, translating to an acceptance rate of 68.4 percent.
Investors preferred the shorter-dated paper, FXD1/2012/15, with an effective tenor to maturity of 6.2 years, which received bids worth 48.8 billion shillings.
FXD1/2021/25 received bids worth 39.9 billion shillings while FXD1/2018/15 received bids worth 28.2 billion shillings.
The coupons for the bonds were 11.0, 12.7, and 13.9 percent, and the weighted average yield rates during the issues were 11.6, 12.6, and 13.9 percent for FXD1/2012/15, FXD1/2018/15, and FXD1/2021/25, respectively.
In the money markets, 3-month bank placements ended at 7.9 percent, while the 91-day T-bill declined by 9.4 bps to 6.5 from 6.6 percent recorded the previous week.
The average yield of the Top 5 Money Market Funds increased marginally by 0.1% points to 9.9% from 9.8%, recorded the previous week, while the yield on the Cytonn Money Market (CMMF) increased by 0.5% points to 10.7% from 10.2%, recorded the previous week.
Read More: T-Bill Subscription Improves But Still Under 100%
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