T-Bills Strike Back With A Oversubscription After Days In The Red

T-bills were oversubscribed, with the overall subscription rate coming in at 111.5 percent last week, up from the 83.5 percent recorded the previous week.

The instant oversubscription was partly attributable to the ample liquidity in the money markets, with the interbank rates remaining unchanged at 4.5% as recorded the previous week.

The 364-day paper recorded the highest subscription rate, receiving bids worth Kshs 15.1 bn against the offered 10.0 billion shillings, translating to a subscription rate of 151.3 percent, an increase from the 107.6 percent recorded the previous week.

The continued oversubscription of the 364-day paper is attributable to investors’ preference for the longer-dated paper which offers a higher yield of 9.7 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 182-day paper increased to 101.5 from 64.0 percent while that of the 91-day paper declined to 37.2 from 72.3 percent recorded the previous week.

The yields on the government papers recorded mixed performance, with the yields on the 364-day papers increasing by 5.6 bps to 9.7 percent, while those of the 182-day and 91-day papers declined by 3.3 bps and 3.5 bps to 8.1 percent and 7.3 percent respectively.

The government accepted bids worth 26.1 billion shillings out of the 26.8 billion shillings worth of bids received, translating to an acceptance rate of 97.3 percent.

In the Primary Bond Market, the government released the auction results for the recently issued 19-year Treasury bond namely; IFB1/2022/019.

The band recorded an oversubscription of 176.3 percent, attributable to the tax-free nature of the bond coupled with the high yields of 13.0 percent offered by the bond.

The government sought to raise 75.0 billion shillings for funding infrastructural projects, received bids worth 132.3 bn, and accepted bids worth 98.6 billion shillings translating to a 74.6 percent acceptance rate.

The coupon rate and the weighted average yield of accepted bids for the bond were both 13.0 percent.

Read More: T-Bills Drop To Below 100% After Weeks Above Waters