T-Bills Remained In The Red As Presidential Tally Melted

T-bills remained undersubscribed, with the overall subscription rate coming in at 82.1 percent, up from the 72.4 percent recorded the previous week.

The increase in the subscription rate was partly attributable to the relatively eased liquidity in the money market as well as the prevailing high yields on the government securities.

Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth 11.8 billion shillings against the offered 4.0 billion shillings, translating to a subscription rate of 294.3 percent, down from the 299.8 percent recorded the previous week.

The subscription rate for the 182-day paper increased to 68.0 percent from 39.3 percent while that of the 364-day paper declined to 11.4 percent from 14.5 percent recorded the previous week.

The yields on the government papers recorded mixed performance with the yields on the 182-day and 91-day papers increasing by 5.9 bps and 10.4 bps to 9.5 and 8.7 percent, respectively, while the yields on the 364-day paper declined by 1.3 bps to 9.9 percent.

The government accepted a total of 19.7 billion shillings worth of bids, translating to an acceptance rate of 99.9 percent.

In the Primary Bond Market, the Central Bank of Kenya released results for the recently re-opened bonds; FXD1/2022/03, FXD2/2019/10, and FXD1/2021/20 with effective tenors of 2.7 years, 6.7 years, and 19.1 years and coupon rates of 11.8, 12.3, and 13.4 percent, respectively.

In line with our expectations, the bonds recorded an undersubscription of 98.3%, partly attributable to investors’ preference for the shorter-dated papers as they sought to avoid duration risks and partly due to the tightened liquidity during the period of issue.

The government issued the bonds seeking to raise Kshs 50.0 bn for budgetary support, received bids worth Kshs 49.1 bn, and accepted bids worth Kshs 38.5 bn, translating to a 78.4 percent acceptance rate.

The weighted average yields for the three bonds were 12.4 percent for FXD1/2022/03, 13.9% for FXD2/2019/10, and 14.0 percent for FXD1/2021/20.

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