T-bills attract less takers ahead of repeat election

Treasury bills uptake remained muted last week as the country approached October 26 presidential election with the government spending remaining low.

The auction fell short of the Sh24 billion target by Sh14.2 billion, with the Treasury accepting Sh9.79 billion from the Sh10.25 billion worth of bids received.

The overall subscription rate for the Treasury bills came in at 42.74 per cent down from 63.19 per cent recorded the previous week. Analysts said jitters over the elections have subdued subscription.

“The liquidity crunch, although easing in the week, has been occasioned by the slow government fund disbursement which will have negative impact on the economy. In addition, an extended political noise will also weigh down on the private sector consumption and output,” said Genghis Capital Ltd.

The Central Bank of Kenya (CBK) auction update on Friday showed that the 91-, 182-, and 364-day papers came in at 63.36 per cent, 43.55 per cent and 33.67 per cent respectively.

The three-month paper attracted bids worth Sh2.53 billion against a target of Sh4 billion, which was accepted by the Treasury.

The six-month tenor paper received bids worth Sh4.35 billion against a target of Sh10 billion, with Treasury accepting Sh4.34 billion from the bids received, while one-year paper attracted bids worth Sh3.36 billion against a target of Sh10 billion, the government took Sh2.91 billion from bids received.

The 91-days tenor paper yield was at 8.097 per cent compared to 8.129 per cent recorded the previous week.

The 182-days paper yield was at 10.316 per cent compared to 10.319 per cent in the previous week, while the 364-day tenor yield was at 10.989 per cent in comparison to 10.975 per cent recorded in the previous week.