T-Bills undersubscribed in past week as 91-day paper reign supreme

T-bills remained undersubscribed last week, with the overall subscription rate coming in at 99.8 percent, an increase from the 69.6 percent recorded the previous week.

The 91-day paper recorded the highest subscription rate, receiving bids worth Ksh.6.1 billion against the offered Ksh.4.0 billion, translating to a subscription rate of 152.3 percent, a decline from the 252.1 percent the previous week.

Investors’ continued interest in the 91-day paper during the week is mainly attributable to the paper’s higher return on a risk-adjusted basis.

The subscription rate for the 182-day paper increased to 150.2 percent, from 32.1 percent recorded the previous week, receiving bids worth Ksh.15.0 billion against the offered amounts of Ksh.10.0 billion.

The subscription rate for the 364-day paper declined to 28.3 percent, from 34.0 percent recorded the previous week, receiving bids worth Ksh.5.6 billion against the offered amount of Ksh.10.0 billion.

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The yields on the 91-day and 182-day papers increased by 2.7 bps and 8.0 bps to 6.5 and 7.0 percent, respectively, while the yields on the 364-day paper declined by 2.7 bps to 7.4 percent.

The government continued to take advantage of the low yields and the high liquidity in the market by accepting Ksh.22.9 billion out of the Ksh.23.9 billion worth of bids received, translating to an acceptance rate of 95.8 percent.

In the money markets, the 3-month bank placements ended the week at 7.7 percent, (based on what we have been offered by various banks) while the yield on the 91-day T-bill increased by 2.7 bps to 6.5 percent.

The average yield of the Top 5 Money Market Funds increased marginally by 0.1 percentage points to 9.9 percent, from the 9.8 percent recorded the previous week.

At the same time, the yield on the Cytonn Money Market Fund increased marginally by 0.1 percentage points to 10.7 percent from 10.6 percent recorded last week.