T-bills Under-subscribed Raising Ksh 10.9 billion Off Target

• The Central Bank of Kenya (CBK) re-opened two 20-year bonds namely, FXD1/2012/20 ( 17.9 years to maturity) and FXD1/2019/20 (11.4 years to maturity) to raise KES.30Bn.

The Central Bank of Kenya’s treasury bills auction was undersubscribed attracting bids amounting to Ksh10.9 billion against the targeted Ksh 24 billion.

This translates to a performance rate of 49.57 percent compared to last week’s 52.33 percent performance rate.

According to the CBK, the 91 days bills received bids worth Ksh2.73 billion against Ksh 4 billion. CBK accepted Ksh 2.25 billion at an average interest rate of 6.295 percent.

The 182 days bills sought Ksh10 billion received bids worth Ksh3.16 billion representing a 31.62 percent performance rate. CBK accepted Ksh2.68 billion at an average interest rate of 6.63 percent.

The 364 days bills seeking Ksh10 billion received bids worth Ksh 5.995 billion representing a 59.95 percent performance rate. Only Ksh 5.995 billion was accepted at an average interest rate 7.55 percent.

Last week, the central bank received Ksh 12.56 billion in bids for the Ksh 24.00 billion worth of papers and accepted Ksh 10.73 billion. 

According to analysts, yields edged marginally higher to 6.273% (+1.60bps), 6.625% (+2.50bps) and 7.507% (+0.10bps) for the 91, 182 and 364 day papers respectively.

“That said, the government’s elevated debt appetite will continue to invite caution, limiting the move lower on the curve. This may however be subject to the market’s appetite and the availability of other comparable investment channels,” NCBA Market Research Analysts.

On the other hand, Treasury has opened the sale of a three-tenor Treasury bond issue for September seeking KSh50 billion for budgetary support.

“The expectation of September primary bond issue is a longer-tenor maturity and as such, we anticipate secondary market activity to be crowded at the short-end of the curve,” according to Genghis Capital.