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T-Bills Leap Beyond 100% After Weeks In The Red

BY Soko Directory Team · May 16, 2022 08:05 am

KEY POINTS

The subscription rate for the 364-day and 182-day papers increased to 113.4 and 79.3 percent, from 78.8 and 37.2 percent, respectively, recorded the previous week.

KEY TAKEAWAYS

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 132.0 percent, a marginal increase from the 131.3 percent recorded the previous week.

T-bills were oversubscribed, with the overall subscription rate coming in at 102.3 percent, up from 70.2 percent recorded the previous week.

The oversubscription was on the back of increasing yields and eased liquidity in the money market with the average interbank rates declining to 4.6 percent, from the 4.8 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 132.0 percent, a marginal increase from the 131.3 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. Analysts say the investors’ appetite for the paper is likely to continue.

The subscription rate for the 364-day and 182-day papers increased to 113.4 and 79.3 percent, from 78.8 and 37.2 percent, respectively, recorded the previous week.

Related Content: T-Bills Drop Further To 55.8% Due To Investors’ Preference Of Longer-Dated Papers

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 2.0 bps, 18.0 bps, and 10.3 bps to 9.9, 8.7, and 7.7 percent, respectively.

The government accepted 23.1 billion shillings worth of bids out of 24.5 billion shillings received, translating to an acceptance rate of 94.1 percent.

In the Primary Bond Market, the government released the auction results for the recently issued ten-year and twenty-five-year bonds, FXD1/2022/10 and FXD1/2021/25, which recorded an undersubscription of 71.9 percent, partly attributable to the relatively tight but recovering money market liquidity.

The government sought to raise 60.0 billion shillings for budgetary support, received bids worth 43.1 billion, and accepted bids worth 31.7 bn, translating to a 73.6 percent acceptance rate.

The longer-dated paper, FXD1/2021/25 had a coupon rate of 13.9 percent and a market-weighted average rate of 14.0% while FXD1/2022/10 had a coupon and weighted average rate of 13.5 percent.

Related Content: T-Bills Uptake Dip As Invested Rush For The 91-Day Paper

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