Central Bank of Kenya. FILE PHOTO | NMG
Summary
The Treasury bills auction was undersubscribed sharply last week amid tightening liquidity and money going towards the bond sale during the week.
The Central Bank of Kenya (CBK) said last week’s auction, which targeted Sh24 billion saw bids worth Sh9.85 billion, with the government taking up Sh9.72 billion.
“The drying up of liquidity in the week as we approach the tail end of the year coupled by the primary bond sale held in the week were the contributing factors,” said city-based investment bank Genghis Capital in a weekly market note.
The undersubscription was despite a marginal increase on interest rates across all the Treasury bill tenors to 6.901 per cent, 7.363 per cent and 8.246 per cent on the 91-day, 182-day and 364-day papers respectively.
Yields on the papers have jumped 90 basis points across the three tenors since touching lows of 6.011 per cent, 6.524 per cent and 7.464 per cent respectively on July 16, and edging up 57.9 basis points in the quarter.
Investors bid were worth Sh1.55 billion on the Sh4-billion 91-day T-bill, and Sh3.01 billion and Sh5.28 billion for the 182 and 364-day offers respectively, which sought Sh10 billion each.
AIB-AXYS Africa has also tied the low subscriptions to increase in activities by CBK in the (repo) market to stabilise shilling. “The subscriptions were poor at 41 per cent rate due to crowding out by repo activities and overnight shilling market,” the firm said in a note on Friday.
The T-bill auction coincided with a sale of the December Treasury bond, which was a dual-tranche reopening of 15-year papers initially sold in 2012 and 2019 — which were also undersubscribed.
No comments :
Post a Comment