T-Bills Still In The Red As June Rushes To An End

By Soko Directory Team / Published June 27, 2022 | 8:52 am

KEY POINTS

The subscription rate for the 364-day and 182-day papers declined to 82.9 and 48.5 percent, from 90.0 and 73.2 percent, respectively, recorded the previous week.

KEY TAKEAWAYS

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 1.3 bps, 6.7 bps, and 8.8 bps to 10.0, 9.2, and 8.0 percent, respectively.

T-bills remained undersubscribed but the overall subscription rate increased to 88.3 percent, from 80.8 percent recorded the previous week.

The undersubscription was partly attributable to the tightened liquidity in the money market with the average interbank rates rising to 5.2 percent, from the 5.1 percent recorded the previous week.

The 91-day paper recorded the highest subscription rate, receiving bids worth Kshs 8.1 bn against the offered Kshs 4.0 bn, translating to a subscription rate of 201.4 percent, an increase from the 76.8 percent recorded the previous week.

The oversubscription is partly attributable to investors’ preference for the shorter-dated paper as they seek to avoid duration risk.

The subscription rate for the 364-day and 182-day papers declined to 82.9 and 48.5 percent, from 90.0 and 73.2 percent, respectively, recorded the previous week.

This was partly attributable to investors attaching higher risk premiums on the country due to perceived higher risks arising from increasing inflationary pressures and local currency depreciation.

The government accepted a total of 20.3 billion shillings worth of bids out of 21.2 billion shillings received, translating to an acceptance rate of 95.7 percent.

In the Primary Bond Market, the Central Bank of Kenya released results for the recently re-opened bonds on tap sale; FXD1/2022/03 and FXD1/2022/15, with tenors to maturity of 3.0 years and 15.0 years, coupons of 11.8 and 13.9 percent respectively.

The bonds recorded an undersubscription of 78.4 percent, partly attributable to the tightened liquidity in the money market with average interbank rates rising to 5.2, from the 5.1 percent recorded the previous week.

The government issued the bonds on tap-sale seeking to raise 25.0 billion shillings for budgetary support, received bids worth 19.6 billion shillings, and accepted bids worth 19.6 billion shillings, translating to a 99.9 percent acceptance rate.

The weighted average yields for the two bonds were 13.9 percent for FXD1/2022/15 and 11.8 percent for FXD1/2022/03.

Related Content: T-Bills Still In The Red, Elections To Blame?

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