T-Bills Drops Further, Hits 56.9% In Subscription During The Week

During the week, T-bills were undersubscribed for the third consecutive week, with the overall subscription rate coming in at 56.9%, albeit lower than the undersubscription rate of 84.1% recorded the previous week.
Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 11.0 bn against the offered Kshs 4.0 bn, translating to an oversubscription rate of 275.2%, albeit lower than the oversubscription rate of 401.7% recorded the previous week.
Read Also: T-Bills In The Red For The Second Consecutive Week Hitting 47.1%
The subscription rate for the 364-day paper decreased to 18.4%, from 25.3% recorded the previous week while that of 182-day paper decreased to 8.1%, from 15.8% recorded the previous week.
The government accepted a total of Kshs 4.5 bn worth of bids out of Kshs 13.7 bn of bids received, translating to an acceptance rate of 33.1%.
The yields on the government papers recorded mixed performance, with the yields on the 182-day and 91-day papers increasing by 1.0 bps and 3.4 bps to 14.9% and 14.8%, respectively while the yield on the 364-day paper decreased by 16.7 bps to 15.1%.
Read Also: A Week Of Economic Drama: Hiked Fuel Prices, Melting Trade Volumes, And Underperforming T-Bills
In the primary bond market, the Central Bank of Kenya released the auction results for the tap sale of the re-opened bond FXD1/2016/10 with a 2.9-year tenor to maturity and the re-opened bond FXD1/2023/02 with a tenor to maturity of 1.9 years.
The tap sale was undersubscribed, receiving bids worth Kshs 3.45 bn against the offered Kshs 15.0 bn, translating to a 23.0% undersubscription rate.
The government accepted bids worth Kshs 3.39 bn, translating to an acceptance rate of 98.5%. For FXD1/2023/002, the allocated average yield of accepted bids came in at 17.5%, 9.6 bps higher than the yield to maturity of 17.4% offered in the secondary market.
The allocated average yield for FXD1/2016/10 came in at 17.9%, 4.9 bps lower than current yield to maturity of 18.0% in the secondary market. The coupon rate for the FXD1/2023/002 was set at 17.0% and FXD1/2016/10 was set at 15.0%, respectively.
Read Also: T-Bills Swim In The Red For Two Weeks Running
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