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Investment

T-Bill Subscription Clock An All-Time Hight At 409%

BY Soko Directory Team · November 11, 2024 09:11 am

KEY POINTS

The subscription rates for the 182-day and 364-day papers increased significantly to 427.8% and 281.5% respectively from the 232.4% and 239.2% respectively recorded the previous week.

KEY TAKEAWAYS

The yields on the government papers were on a downward trajectory, with the yields on the 364-day, 182-day, and 91-day papers decreasing by 52.1 bps, 68.3 bps, and 51.6 bps to 14.4%, 13.8%, and 13.4% respectively from 15.0%, 14.5% and 14.0% respectively recorded the previous week.

During the week, T-bills were oversubscribed for the sixth consecutive week, with the overall oversubscription rate coming in at 409.9%, higher than the oversubscription rate of 259.0% recorded the previous week.

Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 27.4 bn against the offered Kshs 4.0 bn, translating to an oversubscription rate of 686.1%, significantly higher than the oversubscription rate of 375.2% recorded the previous week.

The subscription rates for the 182-day and 364-day papers increased significantly to 427.8% and 281.5% respectively from the 232.4% and 239.2% respectively recorded the previous week.

The government accepted a total of Kshs 53.7 bn worth of bids out of Kshs 98.4 bn bids received, translating to an acceptance rate of 54.6%.

The yields on the government papers were on a downward trajectory, with the yields on the 364-day, 182-day, and 91-day papers decreasing by 52.1 bps, 68.3 bps, and 51.6 bps to 14.4%, 13.8%, and 13.4% respectively from 15.0%, 14.5% and 14.0% respectively recorded the previous week.

Read Also: Kenya’s T-Bill Subscription In October Hit 305% – Report

Also, during the week, the Central Bank of Kenya released the auction results for the re-opened bonds, FXD1/2023/010 with a tenor to maturity of 8.2 years, and a fixed coupon rate of 14.2% and FXD1/2022/015 with a tenor to maturity of 12.4 years, and a fixed coupon rate of 13.9%.

The bonds were oversubscribed with the overall subscription rate coming in at 132.2%, receiving bids worth Kshs 33.0 bn against the offered Kshs 25.0 bn. The government accepted bids worth Kshs 25.7 bn, translating to an acceptance rate of 77.7%.

The weighted average yields of accepted bids for the FXD1/2023/010 and the FXD1/2022/015 came in at 16.0% and 16.3% respectively, which were below our expectation of within a bidding range of 16.25%-16.55% for the FXD1/2023/010 and 16.45%-16.55% for the FXD1/2022/015.

Notably, the 16.0% yield on the FXD1/2023/010 was lower than the 16.4% rate recorded on the last sale in June 2024, while the 16.3% yield on the FXD1/2022/015 was higher than the 14.2% recorded the last time it was offered in January 2023.

With the Inflation rate at 2.7% as of October 2024, the real return of the FXD1/2023/010 and the FXD1/2022/015 is 13.3% and 13.6% respectively.

Read Also: Bolt Commits Ksh 14 Billion To Raise Awareness On Safety Features

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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