T-Bill Subscription Moves Past 900% As Investors Rush For Short-Term Papers

By Standard Investment Bank / Published November 20, 2023 | 11:53 am

KEY POINTS

Subscription for the shorter 91-day paper increased to 942.71%, from 931.41%, in the previous week while that of the 182-day and 364-day papers decreased to 93.97% and 28.91%, from 185.90% and 55.07%, in the previous week, respectively.

Treasury bills were for the third consecutive week with the overall subscription coming in at 208.32%, down from 255.64%. The Central Bank received a total of Ksh 50.0bn in bids, with 75.42% geared towards the 91-day paper.

T-Bills

Bond turnover in the domestic secondary market extended the previous’ weeks gains by 18.51% to KES 12.13bn, from KES 10.23bn recorded the previous week. Infrastructure bonds were the most traded during the week.

On the international front, Eurobond yields followed a downward trend, with the most significant decrease observed in the yields of the 10-year Eurobond maturing in June 2024 – the decline followed the completion of IMF’s staff-level agreement on the sixth review of the Extended Fund Facility and Extended Credit Facility Arrangements which upon approval will see Kenya receive USD 682.3m funding.

Bond

Liquidity in the money market moderated for the third week in a row, as the average interbank rate slowed to 11.02%, from 11.57% in the previous week, supported by government payments that offset tax remittances. Subsequently, the average traded volumes jumped to KES 22.73bn from KES 13.03bn, the previous week.

The Central Bank maintained its support to liquidity-strapped entities by injecting KES 68.43bn through a 7-day reverse repo purchase at an average rate of 11.71%.