T-Bills Still In The Red, Dropping To 74.2% Last Week

T-bills remained undersubscribed, with the overall subscription rate coming in at 74.2 percent last week. This was a marginal decline from 74.3 percent recorded the previous week.

The 91-day paper recorded the highest subscription rate, receiving bids worth 6.5 billion shillings against the offered 4.0 billion shillings, translating to a subscription rate of 163.0 percent, a significant increase from the 75.4 percent recorded the previous week.

The oversubscription was partly attributable to increased investors’ preference for the shorter-dated paper due to the better risk-adjusted return.

The subscription rate for the 182-day and the 364-day papers decreased to 65.3 and 47.6 percent, from 90.1 and 58.2 percent, respectively, recorded the previous week.

The yields on the 91-day and 364-day papers increased by 6.8 bps and 13.0 bps, to 7.0 and 8.4 percent, respectively, while the yield on the 182-day paper declined by 1.1 bps to 7.4 percent.

The government continued to reject expensive bids, accepting bids worth 15.9 billion shillings out of the 17.8 billion shillings bids received, translating to an acceptance rate of 89.0 percent.

At the same time, during the week, liquidity in the money market eased slightly, with the average interbank rate declining marginally to 4.5 percent, from 4.6 percent recorded the previous week.

This was partly attributable to government payments coupled with the Treasury Bill’s redemptions of 6.5 billion shillings, which offset tax remittances.

Additionally, there was a 3.6 percent increase in the average volumes traded in the interbank market to 12.9 billion shillings, from 12.4 billion shillings recorded the previous week.