T-Bill Subscription Hit 150% During The Month Of February

During February 2024, T-bills were oversubscribed, with the overall average oversubscription rate coming in at 150.4%, higher than the oversubscription rate of 133.7% recorded in January 2024.

The overall average subscription rates for the 364-day and 182-day papers increased to 90.0% and 63.6%, from 24.9% and 53.1% respectively, while the overall average subscription rates for the 91-day paper decreased to 518.3% from 607.6%, which was recorded in January 2024.

The average yields on the government papers were on an upward trajectory in the month, with the 364-day, 182-day, and 91-day papers yields increasing by 51.3 bps, 49.0 bps, and 38.6 bps to 16.9%, 16.7%, and 16.5% respectively from 16.4%, 16.2% and 16.1 recorded the previous month.

For February, the government accepted a total of Kshs 159.1 bn of the Kshs 180.4 bn worth of bids received, translating to an acceptance rate of 88.2%.

Notably, the growth in the government papers yields was slower in February compared to January, with the yields on the 91-day paper growing by 38.6 bps, compared to 43.8 bps growth that was recorded in January, partly attributable to market volatility following the Eurobond buyback.

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This week, T-bills were undersubscribed for the first time in nine weeks, with the overall undersubscription rate coming in at 99.5%, a reversal from the oversubscription rate of 154.1% recorded the previous week.

Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 12.3 bn against the offered Kshs 4.0 bn, translating to an oversubscription rate of 306.5%, higher than the oversubscription rate of 247.6% recorded the previous week.

The subscription rates for the 182-day paper and 364-day paper decreased significantly to 20.4% and 95.8% respectively, from 74.2% and 196.5%, recorded the previous week. The government accepted a total of Kshs 22.9 bn worth of bids out of Kshs 23.9 bn of bids received, translating to an acceptance rate of 95.9%.

The yields on the government papers continued to rise, with the yields on the 364-day, 182-day, and 91-day papers increasing by 5.3 bps, 5.1 bps, and 3.2 bps to 17.0%, 16.8%, and 16.6%, respectively,

So far in the current FY’2023/24, government securities totaling Kshs 1,265.0 bn have been advertised. The government has accepted bids worth Kshs 1,558.5 bn, of which Kshs 1,009.9 bn and Kshs 548.6 bn were treasury bills and bonds, respectively.

Total redemptions so far in FY’2023/24 equal to Kshs 1,234.1 bn, with treasury bills accounting for Kshs 1116.0 bn and bonds accounting for Kshs 118.1 bn. As a result, the government has a domestic borrowing surplus of Kshs 324.5 bn in FY’2023/24.

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