Investors avoid Kenya’s Treasury Bond to raise merely Ksh.1.7 billion
The National Treasury re-opened a three-year and a fifteen-year Treasury Bond for auction which saw investors in a seemingly tight-liquidity market avoid.
Figures from the Central Bank of Kenya (CBK) indicate that out of Ksh.30 billion that had been put up for auction, only Ksh.7.3 billion was received but Ksh.1.75 billion was accepted.
This deals a major blow to the government in an effort to support public spending amid a cash crunch.
The subscription rate was 24.43 percent – a slight improvement from the previous auction, but a dismal performance.
Initially, people would rush to invest in bonds.
A number of investors have lost confidence in such type of investment over the state’s inability to repay debts.
“Investors also pointed out that they are likely to get faster and better returns on their investment elsewhere as compared to investing in Treasury Bonds. Others indicated that they did not have the cash to spare to invest in the latest Treasury Bonds,” this is according to a report by Soko Directory, an online news agency.
Kenya had flooded a 10-year Treasury Bond with an aim of raising Ksh.20 billion but the April 5, 2023 results indicated the state only managed to raise Ksh.3.57 billion.
The results reflected a subscription rate of 17.85 percent, the worst subscription in decades.