T-Bill Subscription Hits 174% As The Shilling Finds A Footing

During the week, T-bills were oversubscribed, with the overall oversubscription rate coming in at 174.2%, a reversal from the undersubscription rate of 99.5% recorded the previous week.

Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 20.6 bn against the offered Kshs 4.0 bn, translating to an oversubscription rate of 515.5%, higher than the oversubscription rate of 306.5% recorded the previous week.

Read Also: Dear Entrepreneur, What is Fundamental Analysis In The Stock Market?

The subscription rates for the 182-day paper and 364-day paper increased significantly to 100.6% and 111.3% respectively, from 20.4% and 95.8% respectively, recorded the previous week.

The government accepted a total of Kshs 40.3 bn worth of bids out of Kshs 41.8 bn of bids received, translating to an acceptance rate of 96.3%.

The yields on the government papers continued to rise, with the yields on the 364-day, 182-day, and 91-day papers increasing by 1.2 bps, 6.3 bps, and 3.8 bps to 17.0%, 16.8%, and 16.7%, respectively.

Read Also: Dear Entrepreneur, Here’s Why Stock Market Is The Best Investment Opportunity For You

In the primary bond market, the Central Bank of Kenya released the auction results for the re-opened bond FXD1/2024/03 with a tenor to maturity of 2.9 years and a fixed coupon rate of 18.4%.

The bond was oversubscribed with the overall subscription rate coming in at 107.7%, receiving bids worth Kshs 43.1 bn against the offered Kshs 40.0 bn.

The government accepted bids worth Kshs 34.3 bn, translating to an acceptance rate of 79.6%. The weighted average yield of accepted bids came in at 18.42%, only 3.7 bps above the prior accepted average rate of 18.39%, which was in line with our expectation of the government rejecting expensive bids to remain within the initial issue rate.

With the Inflation rate at 6.3% as of February 2024, the real return of the bond is 12.1%.

Read Also: The Significance of Stock Market Education And the Impact Of Foreign Investors On The NSE