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Economy

Treasury reopens M-Akiba bond sale

A screenshot of a user accessing the M-Akiba mobile traded bond. PHOTO | SALATON NJAU | NMG
A screenshot of a user accessing the M-Akiba mobile traded bond. PHOTO | SALATON NJAU | NMG 

The National Treasury has said it will re-open the sale of the mobile-based infrastructure bond M-Akiba on Monday, hoping to attract more takers after the low interest in 2017.

The sale will start on Monday, February 25 and runs up to March 8, with the Treasury targeting Sh250 million during this period. The reopening will see investors once again offered 10 percent in interest.

The bond targets investors who can put in as low as Sh3,000 via their mobile phones then lock it in for a period of three years. They then earn interest after every six months and principal amount upon reaching maturity date.

Those wishing to exit early can do so through Nairobi Securities Exchange where the bond will trade on secondary market

The tax free bond returns to the market about two weeks to March 11 when investors who participated in the previous offer will be getting their third interest. The pilot sale of Sh150 million was in March 2017.

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It was followed by official launch sale in June 2017 targeting Sh1 billion but was undersubscribed, raising only Sh247.47 million. It had a green-shoe option of Sh3.85 billion, meaning government was ready to accept up to this much was there to be appetite.

Government plans to raise Sh1 billion this year from the bond which is bought through Safaricom’s #ticker:SCOM M-Pesa, Airtel Money and interbank money transfer platform PesaLink. The next sales will be in May, July and August, each targeting Sh250 million.

Treasury returns to the market with hope that a learning curve has been established and that there will be more takers of this bond whose minimum investment is Sh3,000- way below the minimum Sh50,000 required to buy other conventional bonds.

Investors using mobile network operators are allowed a maximum of Sh140,000 per day while those on Pesalink can put in maximum initial amount of Sh999,999.

The 2017’s poor performance of the bond was linked to poor public education as well as the general elections.

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