January Saw T-Bills Oscillate Above 100% – Cytonn

January

During the month of January, T-bills were oversubscribed, with the overall subscription rate coming in at 120.1 percent, an increase from the 61.5 percent recorded in December 2021.

The increase in the subscription rate was partly attributable to the ample liquidity in the money market partly attributable to government payments which offset tax remittances, with the average interbank rate declining to 4.5 percent, from the 5.1 percent recorded in December 2021.

The overall subscription rates for the 182-day and 364-day papers increased to 94.3 and 160.2 percent, from 50.2 and 56.4 percent, respectively, recorded in December 2021.

The subscription rate for the 91-day paper on the other hand declined to 84.3, from the 102.3 percent recorded in December 2021.

The yields on the 91-day, 182-day, and 364-day papers increased by 7.1 bps, 8.9 bps, and 31.6 bps to 7.3, 8.1, and 9.5 percent, respectively.

For the month of January, the government accepted a total of 106.6 billion shillings out of the 115.3 billion shillings worth of bids received, translating to a 92.5 percent acceptance rate.

Last Week

During the week, T-bills remained oversubscribed, with the overall subscription rate coming in at 115.8 percent, from 107.9 percent recorded the previous week, partly attributable to ample liquidity in the money market.

The 364-day paper recorded the highest subscription rate, receiving bids worth 16.2 billion shillings against the offered 10.0 billion shillings, translating to a subscription rate of 161.7 percent, a decrease from the 190.6 percent, recorded the previous week.

The continued oversubscription witnessed for the 364-day paper is attributable to investors’ preference for the longer-dated paper which offers higher yields of 9.6 percent compared to the 7.3 and 8.1 percent yields offered by the 91-day and 182-day papers, respectively.

The subscription rate for the 91-day and 182-day papers, on the other hand, increased to 84.6 and 82.4 percent, from 37.7 and 53.4 percent, respectively, recorded the previous week.

The yields on the government papers recorded mixed performance, with the yields on the 91-day and 182-day papers declining by 2.6 bps and 1.7 bps to 7.3 and 8.1 percent, respectively, while the yield on the 364-day paper increased by 5.0 bps to 9.6 percent.

The government continued to reject expensive bids, accepting bids worth 25.8 billion shillings out of the 27.8 billion shillings worth of bids received, translating to an acceptance rate of 93.0 percent.

During the month, the government released the auction results for the three re-opened bonds; FXD1/2020/05, FXD2/2018/10, and FXD1/2021/20.

The bonds recorded an oversubscription of 111.3 percent driven by the ample liquidity in the money market during the month coupled with the attractive yields offered by the bonds.

The government was keen on maintaining low rates and thus accepted only 62.3 billion shillings of the 66.8 billion shillings worth of bids received, translating to an acceptance rate of 93.6 percent.

Read More: T-Bills Oversubscribed, Njaanuary Comes To An End