91-day T-bill attracts few takers as focus turns to longer tenors

The Central Bank of Kenya (CBK) building in Nairobi. FILE PHOTO | NMG

By JAMES NGUNJIRI

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Summary

• During last week’s Treasury bills auction, the three-month tenor performance was at 63.76 per cent, only managing to raise Sh2.55 billion against an offer of Sh4 billion.
• The Treasury, through the Central Bank of Kenya (CBK) acting as its fiscal agent, accepted Sh1.86 billion from what investors had offered.
• Market analysts on Friday said although the primary bond sale was still ongoing in the week, this did not dampen the discounted securities segment, which is an indicator of improved market liquidity.

The 91-day Treasury bill paper has registered the lowest subscription rate in five auctions, a development attributed to investors’ preference for the longer tenors.

During last week’s Treasury bills auction, the three-month tenor performance was at 63.76 per cent, only managing to raise Sh2.55 billion against an offer of Sh4 billion.

The Treasury, through the Central Bank of Kenya (CBK) acting as its fiscal agent, accepted Sh1.86 billion from what investors had offered.

During the previous week’s auction, the 91-day paper was also the least subscribed tenor and with a 0.7 basis points (bps) difference between the market-weighted average rate and weighted average rate of accepted bids.

Market analysts on Friday said although the primary bond sale was still ongoing in the week, this did not dampen the discounted securities segment, which is an indicator of improved market liquidity.

During the week’s auction, however, the Treasury bills in total were oversubscribed with the CBK receiving bids worth Sh33.56 billion against an offer of Sh24 billion, a 139.86 per cent overall subscription rate.

READ: Kenya plans to issue first green bond next year

The performance rates of 182-day and 364-day tenors came in at 114.20 per cent and 195.96 per cent, respectively.

“Yields on the 91-, 182-, and 364-days papers came in at 8.023 per cent, 10.401 per cent, and 11.128 per cent respectively,” CBK data showed.

The six-month tenor attracted bids worth Sh11.41 billion against an offer of Sh10 billion. The Treasury took up Sh8.45 billion from what investors had offered.

The one-year tenor attracted bids worth Sh19.59 billion against an offer of Sh10 billion. The Treasury accepted Sh18.60 billion from investors.