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

T-bills were undersubscribed, with the overall subscription rate coming in at 70.2 percent, down from the 117.8 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 131.3 percent, a decline from the 254.6 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 declined to 78.8 and 37.2 percent, from 93.9 and 87.0 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 6.4 bps, 8.4 bps, and 8.3 bps to 9.8, 8.5, and 7.6 percent, respectively.

The government accepted all the 16.8 billion shillings worth of bids received, translating to an acceptance rate of 100.0 percent, reflecting the elevated borrowing appetite by the government as it nears the end of the current fiscal year 2021/2022.

At the same time, during the week, liquidity in the money markets remained relatively stable, with the average interbank rate remaining relatively unchanged at 4.8 percent, as recorded the previous week, partly attributable to government payments that offset tax remittances.

The average interbank volumes traded increased by 1.6 percent to 17.3 billion shillings from 17.0 billion shillings recorded the previous week.

Rates in the Fixed Income market have remained stable due to the relatively ample liquidity in the money market.

The government is 1.9 percent ahead of its prorated borrowing target of 572.6 billion shillings having borrowed 583.3 billion shillings of the 661.6 billion shillings borrowing target for the FY’2021/2022.

“We expect a gradual economic recovery as evidenced by the revenue collections of 1.2 trillion shillings during the first eight months of the current fiscal year, which was equivalent to 100.8 percent of the prorated revenue collection target,” said Cytonn Investments.