T-Bills Continue To Smile, Ends The Week At 116%

T-bills remained oversubscribed, with the overall subscription rate coming in at 116.3 percent last week, up from 102.3 percent recorded the previous week.

The performance, according to Cytonn Investments, was on the back of increasing yields and eased liquidity in the money market with the average interbank rates declining to 4.4 percent, from the 4.6 percent recorded the previous week.

The 91-day paper recorded the highest subscription rate, receiving bids worth 5.3 billion shillings against the offered 4.0 billion shillings, translating to a subscription rate of 136.9 percent, a marginal increase from the 132.0 percent recorded the previous week.

The continued investor preference for the 91-day paper is partly attributable to the higher return on a risk-adjusted basis. The subscription rate for the 364-day and 182-day papers increased to 121.8 and 102.5 percent, from 113.4 percent and 79.3 percent, respectively, recorded the previous week.

The yields on the government papers were on an upward trajectory, with the yields on the 364-day, 182-day, and the 91-day papers increasing by 1.9 bps, 11.0 bps, and 7.5 bps to 9.9, 8.8, and 7.8 percent, respectively.

The government rejected expensive bids accepting only 22.9 billion shillings worth of bids out of 27.9 billion shillings received, translating to an acceptance rate of 81.9 percent.

The government released the auction results for the tap-sale of the two bonds, FXD1/2022/10 and FXD1/2021/25, seeking to raise 10.0 billion shillings.

The bonds were oversubscribed, receiving bids worth 17.0 billion shillings against the offered 10.0 billion shillings, translating to a subscription rate of 170.1 percent.

The oversubscription can be attributed to the eased liquidity in the money market during the period of issue and the relatively high coupon rates of 13.5 and 13.9 percent, for FXD1/2022/10 and FXD1/2021/25, respectively.

The government accepted all 17.0 billion shillings of the 17.0 billion shillings worth of bids received, translating to an acceptance rate of 100.0 percent. The weighted average rate of accepted bids for FXD1/2022/10 and FXD1/2021/25 were 13.5 and 14.0 percent, respectively.

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