Rush For Short-Term T-Bills Kept The Above 100% In May

During the month of May 2023, T-bills were oversubscribed, with the overall average subscription rate coming in at 115.8 percent, higher than the 109.6 percent recorded in the month of April 2023.

The average subscription rate for the 91-day paper decreased to 499.9 percent, from the 534.4 percent recorded in April 2023, while subscription rates for the 364-day and 182-day papers increased to 31.4 and 46.6 percent, from 27.3 and 21.9 percent respectively.

The average yields on the government papers were on an upward trajectory, with the average yields on the 364-day, 182-day, and 91-day papers increasing by 37.0 bps, 40.9 bps, and 43.5 bps to 11.3, 10.8, and 10.5 percent, from 10.9, 10.4, and 10.0 percent respectively recorded in April 2023.

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For the month of May, the government accepted a total of 136.8 billion shillings of the 139.0 billion shillings worth of bids received, translating to an acceptance rate of 98.4 percent.

Additionally, in May 2023 bonds were oversubscribed, with the overall subscription rate coming in at 115.3 percent, up from an undersubscription rate of 26.7 percent, recorded in April 2023.

The newly issued bond FXD1/2023/003 received bids worth Kshs 20.7 bn against the offered 20.0 billion shillings, translating to an oversubscription rate of 103.7 percent with the government accepting bids worth 20.3 billion shillings, translating to an acceptance rate of 97.8 percent.

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The bond’s first tap sale received bids worth Kshs 10.6 bn against the offered Kshs 10.0 bn, translating to an oversubscription rate of 106.0 percent, with the government accepting bids worth 10.6 billion shillings translating to an acceptance rate of 100.0 percent.

The FXD1/2023/003-second tap-sale received bids worth 27.2 billion shillings against the offered 20.0 billion shillings translating to an oversubscription rate of 136.0 percent, with the government accepting bids worth Kshs 27.2 bn translating to an acceptance rate of 100.0 percent.

During the week, T-bills were undersubscribed for a second consecutive week, with the overall subscription rate coming in at 98.2 percent, higher than the 91.9 percent recorded the previous week.

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Investor’s preference for the shorter 91-day paper persisted as they sought to avoid duration risk, with the paper receiving bids worth 23.6 billion shillings against the offered 4.0 billion shillings, translating to an oversubscription rate of 511.3 percent, up from 356.1 percent recorded the previous week.

The subscription rates for the 364-day paper and 182-day papers decreased to 25.6 and 5.5 percent, from 37.6 and 40.4 percent recorded the previous week, respectively.

The government accepted bids worth Kshs 20.6 bn out of the 23.6 billion shillings total bids received, translating to an acceptance rate of 87.6 percent.

The yields on the government papers recorded mixed performance with the yields on the 364-day and 91-day papers increasing by 4.0 bps and 27.1 bps to 11.5 and 11.1 percent, respectively, while the yield on the 182-day paper declined by 0.1 bps to 11.1 percent.

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