T-Bills Still Reigning Supreme, Hits 117% During The Week

During the week, T-bills remained oversubscribed, with the overall subscription rate coming in at 117.9 percent, a slight increase from the 116.7 percent recorded the previous week.

Investor’s preference for the shorter 91-day paper persisted, with the paper receiving bids worth 19.5 billion shillings against the offered 4.0 billion shillings, translating to a subscription rate of 488.0 percent, up from 253.8 percent recorded the previous week.

The subscription rate for the 364-day paper slightly increased to 39.7 percent from 39.2 percent recorded the previous week while the subscription rate for the 182-day paper declined to 48.2 percent from 139.5 percent 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 91-day papers increasing by 1.8 bps, 0.8 bps, and 4.2 bps to 9.9, 9.7, and 9.1 percent, respectively.

In the Primary Bond Market, the Central Bank of Kenya released results for the newly issued bond; FXD1/2022/025 with compelling tenors to maturity of 25 years.

“Per our expectations, the bond recorded an undersubscription of 74.5 percent, partly attributable to investors’ preference for the shorter-dated papers as they sought to avoid duration risk,” said Cytonn Investments.

The government issued the bond seeking to raise Kshs 20.0 bn for budgetary support, received bids worth 14.9 billion shillings, and accepted bids worth 13.7 billion shillings, translating to a 91.7 percent acceptance rate.

The coupon rate and weighted average yield for the bond each came in at 14.2 percent.

During the week, liquidity in the money markets tightened, with the average interbank rate increasing to 5.1 percent from 5.0 percent recorded the previous week, partly attributable to tax remittances that offset government payments.

The average interbank volumes traded increased by 139.1 percent to 31.7 billion shillings from 13.3 billion shillings recorded the previous week.

Related Content: T-Bills Hit 116.7% In Subscriptions, 6% Up From Last Week