August Ends With T-Bills In The Red, Any Goodies In September?

During the month of August, T-bills remained undersubscribed, with the overall subscription rate declining to 73.2 percent, from 97.4 percent recorded in July 2022 partly driven by the uncertainty which surrounded the August 2022 general elections.

The overall subscription rates for the 91-day paper increased to 280.6 percent from 278.1 percent while that of the 182-day and 364-day papers declined to 40.4 and 22.9 percent from 74.8 and 47.6 percent recorded in July 2022, respectively.

The average yields on the government papers recorded mixed performance with the 182-day and 91-day papers increasing by 16.3 bps and 36.6 bps to 9.4 and 8.6 percent, respectively, while the average yield on the 364-day paper declined by 5.8 bps to 9.9 percent.

For the month of August, the government continued to reject expensive bids, accepting a total of 81.8 billion shillings out of the 87.8 billion shillings worth of bids received, translating to an acceptance rate of 93.1 percent.

During the week, T-bills were oversubscribed, with the overall subscription rate coming in at 128.8 percent, an increase from the 80.9 percent recorded the previous week.

The increase in the subscription rate was partly attributable to the eased liquidity in the money market with the average interbank rates decreasing to 5.0 from 5.1 percent recorded the previous week.

The shorter 91-day paper remained oversubscribed for the tenth consecutive time, with the paper receiving bids worth 16.3 billion shillings against the offered 4.0 billion shillings, translating to a subscription rate of 406.6 percent, up from the 270.4 percent recorded the previous week.

The subscription rate for the 182-day paper also increased to 112.3 from 41.6 percent while the 364-day paper declined to 34.1 from 44.4 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 4.4 bps and 9.3 bps to 9.6 and 8.9 percent, respectively, while the yields on the 364-day paper declined by 3.4 bps to 9.9 percent.

The government continued to reject expensive bids, accepting a total of 21.1 billion shillings worth of bids out of the 30.9 billion shillings worth of bids received, translating to an acceptance rate of 68.4 percent.

The August 2022 bonds remained undersubscribed, receiving bids worth 49.1 billion shillings against the offered 50.0 billion shillings, translating to a subscription rate of 98.3 percent.

The performance was partly attributable to the increased perceived risks arising from increasing inflationary pressures, the August general elections, and local currency depreciation.

Related Content: T-Bills In The Red, Investors Rush For Shorter 91-Day Papers