The share of domestic debt held by retail investors has shot up to a new high indicating the greater participation of the investor class in the just-closed infrastructure bond sale.
According to data from the Central Bank of Kenya (CBK), domestic debt held by the retail investors rose to 11.52 percent as of February 16 from 11.38 percent on February 9.
In contrast, the share of State domestic debt held by banking institutions fell slightly to 45.64 percent from 45.8 percent in the same period.
Similarly, the share of domestic debt held by insurance companies and pension funds dropped to 7.34 and 29.81 percent from 7.35 and 29.9 percent respectively.
Parastatals, however, increased their share of domestic debt to 5.69 percent from 5.57 percent in the review period. The bump in the share of government domestic by retail investors comes after their strong participation in the recent infrastructure bond auction.
The bond whose auction closed on February 14, received bids worth Sh288.6 billion, outstripping demand of only Sh70 billion.
The CBK accepted Sh240.9 billion out of the bids at a weighted average rate of 18.4607 percent.
Non-competitive bids which refer to interest by investors without stating a specific rate of return totaled Sh22.9 billion with the offers being largely derived from retail investors.
In absolute terms, holdings of government domestic debt by retail investors stood at a cumulative Sh568 billion at the end of January, or 11.37 percent of the Sh5 trillion domestic debt stock at the end of last month.
Banking institutions, insurance firms and pension funds have been shunning investments in government securities, especially bonds owing to mark-to-market losses exposures in the past year.
