Treasury bills subscription flat as banks go for new bond

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

By JAMES NGUNJIRI

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Summary

• The CBK last week received bids worth Sh27.36 billion against an offer of Sh24 billion, a 114.02 per cent overall subscription rate.
• The central bank accepted Sh22.92 billion from what investors had offered.

Treasury bills subscription rates were last week impacted by the primary bond sale that closed at about the same time, even though the overall subscription was positive.

During the auction, the Central Bank of Kenya (CBK) received bids worth Sh27.36 billion against an offer of Sh24 billion, a 114.02 per cent overall subscription rate.

The CBK accepted Sh22.92 billion from what investors had offered.

The subscription rates for the 91-day and 182-day papers underwhelmed with uptake coming in at 54.63 per cent and 78.19 per cent respectively. It is only the 364-day paper which was oversubscribed by 173.60 per cent.

“Yields on the 91-day paper came in at 8.005 per cent, 182-day paper at 10.385 per cent and 364-day paper at 11.126 per cent,” a CBK notice indicated last Friday.

Market analysts said the excess cash that ordinarily are parked at the 91-day and 182-day for liquidity management found a home on the shorter-dated bond at the primary bond sale.

They said with Sh14.58 billion rejected at the bond auction, there is a likelihood of seeing the cash buoying the Treasury bill segment in this week’s auction.