Investors avoid Sept Tap Sale to raise only Ksh.3.4bn of Ksh.15bn offered

Investors prefered shorter investment tenures as bids remained heavily undersubscribed in Sept.

Investors heavily avoided the September Treasury Bond Tap Sale pointing to a lack of trust in the government to repay its debt.

The Central Bank of Kenya (CBK), National Treasury’s fiscal agent had re-opened a two-year and a ten-year Ksh.15 billion Treasury Bond for auction on Sept 22, 2023.

Out of Ksh.15 billion auction, only Ksh.3.4 billion was received but Ksh.3.3 billion was accepted.

A two-year tap sale attracted Ksh.2.63 billion compared to a ten-year Bond which attracted a mere Ksh.814 million.

This deals a major blow to the government in an effort to support debt repayment plans.

The last time investors heavily avoided T-Bond was in April this year when the CBK managed to raise only Ksh.7.3 billion from Ksh.30 billion bid.

Undersubscription in T-Bonds indicates that investors prefer faster and better returns on their investment elsewhere compared to investing in Bonds.

Treasury Bills Undersubscribed

The same case applied to the Treasury Bills (T-Bills) which remained undersubscribed at 56 percent when the CBK raised Ksh.13.6 billion out of Ksh.24 billion offered.

Investors went for shorter 91-day tenure which attracted Ksh.11 billion out of Ksh.4 billion offered.

Both 182 and 365-day tenure were undersubscribed at Ksh.809 million and Ksh.1.8 billion out of Ksh.10 billion and Ksh.10 billion bids offered, respectively.

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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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