Investors avoid duration risk in T-Bills as subscription rate hits 110% to Ksh.19 billion

Kenya blacklists expensive creditors as Treasury seeks new facility from World Bank

Based on market analysis for the past week, Treasury Bills were oversubscribed, with the overall subscription rate at 110.7%, up from 37.5%.

Investors’ preference for the shorter 91-day paper persisted as they sought to avoid duration risk, with the paper receiving bids worth Ksh.19.3 billion against the offered Ksh.4.0 billion.

It translates to an oversubscription rate of 508.0%, significantly higher than the 167.2% recorded the previous week.

The subscription rate for the 182-day and the 364-day papers increased to 53.4% and 9.2%, from 14.4% and 8.7%, respectively, recorded the previous week.

The government accepted bids worth Ksh.25.5 billion out of the Ksh.26.6 billion total bids received, translating to an acceptance rate of 96.1%.

The yields on the government papers were on an upward trajectory, with the yields on the 364-day paper, 182-day and 91-day papers increasing by 4.6 basis points (bps), 16.7 bps and 4.3 bps to 11.2%, 10.7% and 10.3%, respectively.  

In the money markets, 3-month bank placements ended the week at 7.7%, while the yields on the 364-day and average yields on the Top 5 Money Market Funds increased by 4.6 bps and 11.6 bps to 11.2% and 10.8%, respectively.

The yields on the 91-day paper increased by 4.3 bps to remain relatively unchanged at 10.3%. In comparison, the yield of Cytonn Money Market Fund decreased by 2.0 bps to remain relatively at 11.0%, similar to what was recorded the previous week.

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Lawrence Baraza is a prolific writer with competencies in Digital Media, Print, and Broadcast. Baraza is also a Communication Practitioner currently spearheading Digital content on Metropol TV's Digital Desk.

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