The National Treasury will introduce an electronic over-the-counter trading platform for bonds, looking to increase exposure of the securities to investors and improve pricing transparency.
In his budget speech Thursday, Treasury CS Ukur Yatani said the government is working with banking lobby, the Kenya Bankers Association and capital market players to roll out the platform within a year.
The digital over-the-counter (OTC) platform is expected to increase trading of Treasury bonds and bills to boost the secondary market trading and deepen the capital markets.
This comes after the introduction of a similar platform for trading of unlisted shares by Nairobi Securities Exchange (NSE).
“This platform will help in deepening our domestic debt market, improve pricing efficiency and transparency in securities trading thereby lowering yields and cost of credit in the economy,’’ Mr Yatani said.
“We expect the operations of the OTC to be in place by June 2022.”
The government borrows from the domestic market through short-term Treasury bills and the longer dated bonds, with the latter currently tradeable on the NSE’s fixed income board. T-bills in the meantime are not listed, and can only be sold by rediscounting (selling them back to the Central Bank) but this is punitive to the investor in order to discourage the practice.
The one year T-bill is however tradeable in an OTC market at the CBK.