T-Bills slightly up after days of dormancy
During the week, T-bills were slightly oversubscribed, with the subscription rate coming in at 100.4%, up from 62.6% the previous week.
The oversubscription was partly attributable to favourable liquidity in the market due to government payments, which saw the average interbank rate declined to 4.1%, from 4.2%, according to Cytonn’s weekly report.
The National Treasury announced that it shall be reopening the 5 year, FXD1/2020/5 and issuing a new infrastructure bond IFB1/2020/6, for a total value of Kshs 30 billion for the FXD1/2020/5 and Ksh25.6 billion for the IFB1/2020/6, for budgetary support purposes and funding of infrastructure projects, respectively.
“As per the historical trend, we expect the market to maintain a bias towards IFB1/2020/6 mainly attributable to its short tenor as well as the tax-free incentive for infrastructure bonds, translating to a higher return. Our recommended bidding range is 11.5 – 11.7 percent for FXD1/2020/5 and 10.5 – 10.8 percent for IFB1/2020/6 given that bonds with the same tenor are currently trading at 11.4 percent and 10.5 percent, respectively, on the yield curve,” said Cytonn in their weekly report.
Oil prices were revised downwards effective from May 15, 2020 to June 14, 2020.
This saw Petrol and diesel prices decline by 10.3% and 19.7% to Kshs 83.3 and Kshs 78.4 per litre, respectively.
Kerosene prices have risen by 3.2% to Kshs 79.8 per litre.