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T-Bill Subscriptions Drops Slightly To 108% But Still Above The Waters

BY Soko Directory Team · April 22, 2024 11:04 am

KEY POINTS

The subscription rates for the 182-day paper and 364-day paper decreased to 78.1% and 122.7% respectively from 105.6% and 192.9% respectively recorded the previous week.

The government accepted a total of Kshs 26.0 bn worth of bids out of Kshs 26.1 bn of bids received, translating to an acceptance rate of 99.6%.

During the week, T-bills were oversubscribed, with the overall oversubscription rate coming in at 108.7%, lower than the oversubscription rate of 192.8% recorded the previous week.

Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 6.0 bn against the offered Kshs 4.0 bn, translating to an oversubscription rate of 150.1%, significantly lower than the oversubscription rate of 410.4% recorded the previous week.

The subscription rates for the 182-day paper and 364-day paper decreased to 78.1% and 122.7% respectively from 105.6% and 192.9% respectively recorded the previous week.

The government accepted a total of Kshs 26.0 bn worth of bids out of Kshs 26.1 bn of bids received, translating to an acceptance rate of 99.6%.

The yields on the government papers recorded mixed performances, with the yield on the 91-day paper increasing by 7.0 bps to 15.80% from the 15.73% recorded the previous week, while the yields on the 364-day and 182-day papers decreased by 2.3 bps and 40.2 bps to 16.51% and 16.47% from 16.53% and 16.87% respectively recorded the previous week.

During the week, The Central Bank of Kenya released the auction results for the reopened bond FXD1/2023/02 with a tenor to maturity of 2.0 years.

The bond was oversubscribed with the overall subscription rate coming in at 118.0%, receiving bids worth Kshs 47.2 bn against the offered Kshs 40.0 bn. The government accepted bids worth Kshs 34.8 bn, translating to an acceptance rate of 73.7%.

The weighted average yield of accepted bids came in at 16.99% which was within our expected range of 16.55%-17.00% and a decline of 74.4 bps from the 17.74% yield of the previous similar tenor reopened FXD1/2023/02 bond issued in October 2023.

The coupon rate for the bond was fixed at 16.97%, similar to the previous issue’s rate. With the Inflation rate at 5.7% as of March 2024, the real return of the bonds is 11.3%.

About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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