Capital Markets

Securities uptake up on higher liquidity

The Central Bank of Kenya (CBK) of Kenya building in Nairobi. FILE PHOTO | NMG
The Central Bank of Kenya (CBK) of Kenya building in Nairobi. FILE PHOTO | NMG 

Improved liquidity, which has seen average interbank rate trend lower, boosted the uptake of Treasury bills during the last week’s auction.

The auction saw heavy subscription as the Central Bank of Kenya (CBK) received bids worth Sh33.19 billion against offers of Sh24 billion, translating to an overall subscription of 138.30 per cent.

The oversubscription was despite the tap sale or reopening of the January infrastructure bond seeking Sh35 billion.

Yields on the 182-day and 364-day papers fell at the auction, mirroring the downtrend on the medium-to-longer term papers.

Market analysts on Friday said they expect the correction on the yield curve to continue in the near-term.

“The rates although remaining range bound at 8.005 per cent, 10.438 per cent and 11.156 per cent on the 91-day, 182-day and 364-day respectively, have taken a downward trend, following the direction taken by the medium and short term portion of the yield curve note.

“We expect the correction on the short and medium term tenors to continue,” said Genghis Capital in a market note.

The subscription rates for the 91-, 182-, and 364-day papers came in at 143.03 per cent, 129.59 per cent and 145.12 per cent respectively. The 91-day paper attracted bids worth Sh5.72 billion against a target of Sh4 billion. The Treasury accepted the entire offer from investors.