Secondary fixed income market turnover rose by 27.78% w/w to KES 18.74Bn from KES 14.67Bn the previous week.
Discount securities recorded a performance rate of 38.10%, down from 164.50% the previous week. The 91-day T-Bill registered an oversubscription of 176.84% in the week – signaling a persistence in investor preference for cash and near-cash securities.
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Overall, T-Bill yields moved up an average of 0.070% w/w across all papers. In the Eurobond segment, credit conditions eased, with the 10-year 2024 paper’s yield coming in at 12.602% (-20.9bps w/w) on 27th July 2023.
Market liquidity tightened aggressively in the week ended 28th July 2023 with the average interbank rate printing at 13.58% (+415bps w/w).
Bearish sentiments prevailed in the market over the week as signaled by the benchmark indices w/w performance. This price movement chipped additional value from the market – with the market’s YTD returns sliding to an erosion of c. 17.4%.
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That said, the total market turnover skyrocketed by 439.6% w/w to KES 4.33Bn. Foreign turnover soared by 528.7% to KES 2.13Bn during the week.
Foreigners remained bearish across key blue chips – with outsized exits on Safaricom – to clock net outflows of KES 3.33Bn.
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“We believe these exits are in part driven by adjustments in foreign portfolios to the tightening monetary environment in their home markets – that in turn rises the opportunity cost in lower-tier emerging and frontier markets. We anticipate seeing heightened activity in the banking sector from this week on the back of 2Q2023 results.”
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Data from Genghis Capital