T-Bills Shine During The Week, Short-Term Bonds Carry The Day

By Juma / Published May 22, 2023 | 10:52 am

KEY POINTS

The subscription rate for the 182-day paper declined to 42.2 percent, down from the 88.4 percent recorded the previous week, while the subscription rate for the 364-day paper increased to 77.1 percent, up from 18.6 percent, recorded the previous week.

KEY TAKEAWAYS

The government accepted bids worth 36.0 billion shillings of the total bids received, translating to an acceptance rate of 99.9 percent.

The yields on the government papers were on an upward trajectory, with the yields on the 364-day paper, 182-day, and 91-day papers increasing by 12.0 bps, 12.5 bps, and 10.8 bps to 11.4, 11.0, and 10.5 percent, respectively.

T-bills were oversubscribed, with the overall subscription rate coming in at 150.1 percent, down from the 188.9 percent, recorded the previous week.

Investor’s preference for the shorter 91-day paper persisted as they sought to avoid duration risk, with the paper receiving bids worth 24.0 billion shillings against the offered 4.0 billion shillings, translating to an oversubscription rate of 602.3 percent, lower than the 865.8 percent recorded the previous week.

The government accepted bids worth 36.0 billion shillings of the total bids received, translating to an acceptance rate of 99.9 percent.

The chart below compares the overall average T- bills subscription rates obtained in 2017, 2022, and 2023 Year to Date (YTD):

T-Bills

In the primary bond market, the Central Bank of Kenya released the tap sale results for the Treasury bond FXD1/2023/003 with a tenor to maturity of 3 years.

“In line with our expectations, the bond recorded an oversubscription rate of 106.0%, partly attributable to investors’ preference for shorter-dated bonds as they seek to avoid duration risk. The government issued the bond seeking to raise Kshs 10.0 bn for budgetary support,” said Cytonn.

The tap sale of the bond received bids worth 10.6 billion shillings, with the government accepting bids worth Kshs 10.6 bn, translating to an acceptance rate of 100.0 percent. Key to note, both the weighted average yield of accepted bids and the coupon rate came at 14.2 percent.

About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com

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