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Kenyan Government Has So Far Advertised Government Securities Worth Ksh 646.0 Billion

BY Soko Directory Team · November 4, 2024 12:11 pm

KEY POINTS

A tap sale of the FXD1/2022/010 bond now with a remaining tenor of 7.5 years and the same 13.5% coupon rate, attracted bids worth Kshs 16.5 billion against an offered Kshs 15.0 billion, resulting in an oversubscription rate of 110.0%.

KEY TAKEAWAYS

Kshs 489.4 billion came from treasury bills and Kshs 196.6 billion from treasury bonds, resulting in a domestic borrowing surplus of Kshs 316.6 billion so far.

In the current fiscal year 2024/25, the government has advertised securities totaling Kshs 646.0 billion and accepted bids worth Kshs 686.0 billion.

Of these, Kshs 489.4 billion came from treasury bills and Kshs 196.6 billion from treasury bonds, resulting in a domestic borrowing surplus of Kshs 316.6 billion so far.

In October 2024, the government’s bond issuance saw high demand, with an overall average oversubscription rate of 139.9%.

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This rate, however, marked a slight decline from the 155.0% recorded in September. Among the bonds offered, the reopened FXD1/2016/010 and FXD1/2022/010 bonds—carrying tenors of 1.8 and 7.6 years, respectively, and fixed coupon rates of 15.0% and 13.5%—garnered bids worth Kshs 51.0 billion against an initial offer of Kshs 30.0 billion, achieving an oversubscription rate of 169.9%. The government accepted bids totaling Kshs 31.3 billion, with an acceptance rate of 61.5% and an average yield of 17.0%.

Further, a tap sale of the FXD1/2022/010 bond, now with a remaining tenor of 7.5 years and the same 13.5% coupon rate, attracted bids worth Kshs 16.5 billion against an offered Kshs 15.0 billion, resulting in an oversubscription rate of 110.0%.

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The government accepted Kshs 15.1 billion, with a high acceptance rate of 91.5%, keeping the average yield steady at 17.0%.

At the same time, the yields on the government securities were on a downward trajectory during the month compared to September 2024, attributed to easing interest rates following the Monetary Policy Committee (MPC) decision to decrease the Central Bank Rate (CBR) by 75.0 bps to 12.00% from 12.75% earlier in the month and relatively stable inflation which came in at 2.7% in October 2024, which have fostered a more positive outlook among investors. The shift in sentiment indicates increased confidence in the economic landscape.

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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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