T-Bill Subscription Hits The Lowest This Year At 29.3%

T-bills remained undersubscribed, with the overall subscription rate coming in at 29.3 percent, a decrease from the 99.8 percent recorded the previous week attributable to the concurrent primary bonds issue.

The 91-day paper recorded the highest subscription rate, receiving bids worth 2.8 billion shillings against the offered 4.0 billion shillings translating to a subscription rate of 70.3 percent, a decline from the 152.3 percent recorded the previous week.

Investors’ continued interest in the 91-day paper during the week is mainly attributable to the paper’s higher return on a risk-adjusted basis.

The subscription rate for the 182-day paper declined to 31.3 percent, from 150.2 percent recorded the previous week, while the subscription rate for the 364-day paper also declined to 10.9 percent, from 28.3 percent recorded the previous week.

The yields on the 91-day and 182-day papers increased by 1.4 bps and 7.1 bps to 6.5 and 7.1 percent, respectively, while the yield on the 364-day paper remained unchanged at 7.4 percent.

The government continued to take advantage of the low yields and the high liquidity in the market by accepting 7.01 billion shillings out of the 7.04 billion shillings worth of bids received, translating to an acceptance rate of 99.6 percent.

In the Primary Bond Market, the three bonds offered by the government for the month of August recorded an oversubscription of 174.4 percent attributable to the high liquidity in the market and the demand by investors for higher yields which are only in the longer-dated bonds.

The government sought to raise 60.0 billion shillings and accepted 80.3 billion shillings out of the 104.6 billion shillings worth of bids received, translating to an acceptance rate of 76.7 percent.

Investors preferred the longer-dated paper, FXD1/2021/20 which received bids worth 43.5 billion shillings, FXD3/2019/10 received bids worth 38.3 billion shillings while FXD1/2018/20 received bids worth 22.8 billion shillings.

The coupons for the bonds were 11.5, 13.2, and 13.4 percent, and the weighted average yield rates during the issues were 12.3, 13.3, and 13.5 percent for FXD3/2019/10, FXD1/2018/20, and FXD1/2021/20, respectively.

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