T-bills were oversubscribed for the third consecutive week, with the overall subscription rate coming in at 164.5 percent, up from an oversubscription rate of 151.8 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 28.5 billion shillings against the offered 4.0 billion shillings, translating to an oversubscription rate of 711.6 percent, albeit lower than the 833.1 percent recorded the previous week.
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The subscription rate for the 364-day and 182-day papers increased to 23.8 and 86.4 percent respectively, up from 17.7 and 13.5 percent recorded the previous week.
The government accepted a total of 36.7 billion shillings worth of bids out of 39.5 billion shillings of bids received, translating to an acceptance rate of 92.9 percent.
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The yields on the government papers continued to rise, with the yields on the 364-day, 182-day, and 91-day papers increasing by 25.6 bps, 5.1 bps, and 12.4 bps to 12.7, 12.3, and 12.2 percent, respectively
In the primary market, the Central Bank of Kenya released the auction results for the tap sale of the re-opened bond FXD1/2016/10 with a 3.2-year tenor to maturity and the newly issued bond FXD1/2023/05 with a tenor to maturity of 5 years.
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The tap sale was oversubscribed, receiving bids worth 44.4 billion shillings against the offered 20.0 billion shillings, translating to a 222.1 percent oversubscription rate.
The government accepted bids worth 43.4 billion shillings, translating to an acceptance rate of 97.8 percent. The coupon rates for FXD1/2016/10 and FXD1/2023/05 are 15.0 and 16.8 percent, respectively.
The allocated average rates for accepted bids are 16.3 and 16.8 percent for FXD1/2016/10 and FXD1/2023/05, respectively.
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At the same time, during the week, the yields on Eurobonds recorded mixed performance, with the yield of the 10-year Eurobond issued in 2014 increasing the most by 0.3 percentage points to 12.8 percent from 12.5 percent recorded the previous week.