A Nairobi Securities Exchange (NSE) staff monitors electronic trade. FILE PHOTO | NMG
The turnover in the secondary bonds
market at the Nairobi Securities Exchange (NSE) dipped by 21.5 per cent
in February compared to January, as investors pumped capital into the
primary market of Treasury bills amid uncertainty over the interest rate
climate.
Market data shows the bonds turnover in February stood at Sh23.4 billion, compared to Sh29.8 billion in January.
Investors
have been showing a preference for short-term primary securities as
they wait to ride out the period of uncertainty over interest rates.
The
governments need to borrow from the domestic market, which would
normally exert upward pressure on rates, has met with central bank’s
determination to keep to the yield curve by rejecting high price bids.
“The
secondary bonds market recorded reduced activity, with turnover
decreasing by 21.5 per cent to Sh23.4 billion in February, despite the
yields on government securities remaining relatively flat during the
month,” said Cytonn investments in a monthly markets summary for
February.
“February was characterised by high Treasury
bill subscriptions, with the overall subscription rate increasing to
177.5 per cent, from 68.5 per cent in January.”
Although it recorded a decline in February, the bonds market was still higher in turnover compared to the same period in 2016.
The turnover for January and February—at Sh53.2
billion—was 14 per cent higher than the Sh46.6 billion recorded over the
first two months of last year
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