T-Bill Subscription Up But Still In The Red – Cytonn

During the week, T-bills subscriptions improved but still remained undersubscribed with the overall subscription rate coming in at 98.9 percent, up from the 48.6 percent recorded last week.

The undersubscription was partly attributable to the concurrent bond issue, which recorded an oversubscription of 108.5 percent.

The 91-day paper recorded the highest subscription rate, receiving bids worth 8.2 billion shillings against the offered 4.0 billion shillings, translating to a subscription rate of 204.5 percent, an increase from the 120.0 percent recorded the previous week.

The subscription rate for the 182-day and 364-day papers increased to 90.2% and 65.4%, respectively, from 26.0% and 42.5 percent, recorded the previous week.

The yields on the government papers were on an upward trajectory with yields on the 91-day, 182-day, and 364-day papers increasing by 2.4 bps, 5.8 bps, and 1.0 bps, to 7.4, 8.4, and 9.8 percent, respectively.

The government accepted all the 23.7 billion shillings worth of bids received, translating to an acceptance rate of 100.0 percent.

In the Primary Bond Market, the government released the auction results for the recently issued fifteen-year treasury bond, FXD1/2022/15, which recorded an oversubscription of 108.5 percent, partly attributable to the ample liquidity in the money markets, with the average interbank rate remaining relatively unchanged at 4.4 percent during the period of the offer.

The government sought to raise 30.0 billion shillings for budgetary support, received bids worth 32.5 billion shillings, and accepted bids worth 27.6 billion shillings, translating to an 84.9 percent acceptance rate. The bond had a coupon rate and a market-weighted average rate of 13.9 percent.

In the money markets, 3-month bank placements ended the week at 7.7 percent (based on what we have been offered by various banks), while the yield on the 91-day T-bill increased by 2.4 bps to 7.4 percent.

The yield on the Cytonn Money Market Fund and an average yield of the Top 5 Money Market Funds remained relatively unchanged at 10.6 and 9.8 percent, respectively, as recorded the previous week.

Read More: T-Bills Still Floating In The Red; Any Hope In The Near Future?