Kenyans’ Appetite For T-Bills Remain High With A Shift To 91-Day Paper

Demand for T-bills remained elevated, with overall performance climbing to 357.3%, from 337.2%, a new high.

Interest shifted to the 91-day paper, which received bids worth KES 34.23bn—accounting for 39.9% of the total bids.

In total, investors submitted bids totaling KES 85.76bn, with the fiscal agent accepting only KES 41.76bn translating to a 48.7% acceptance rate.

The weighted average rate for accepted bids was: 14.43% (-33.37 bps) for the 91-day paper, 15.15% (-48.98 bps) for the 182-day paper and 15.47% (-44.24 bps) for the 364-day paper.

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The largest gap between market and accepted rates was observed in the 182-day tenor, which also saw a lower acceptance rate compared to the other papers.

In the primary bond market, the fiscal agent is seeking to raise KES 35.0bn, through three reopened bonds; FXD1/2023/10, FXD1/2022/15 and FXD1/2024/10, with remaining tenors of 8.3, 12.4 and 9.4 years, respectively.

The coupon rates for these bonds are 13.94% for the 2022 issuance, 14.15% for the 2023 issuance and 16.00% for the 2024 issuance. The period of sale runs up to 11th November for FXD1/2023/10 AND FXD1/2022/15 and up to 18th November 2024 for FXD1/2024/10.

During the week, liquidity in the interbank market remained stable with the average lending rate increasing marginally to 11.97%, down from 11.91% in the previous week.

Market activity declined slightly, with average traded volumes dropping by 4.9% to KES 41.86bn, up from KES 44.03bn, in tandem with a 1.9% rise in the number of interbank transactions. The discount window also remained active for the third consecutive week, signaling liquidity challenges for some players.

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