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Capital Markets

T-bill auction flops again as investors snub offer

Central Bank of Kenya
The Central Bank of Kenya. FILE PHOTO | NMG 

The Treasury bill auction last week continued on a poor show, being undersubscribed 40 per cent and raising just Sh14.5 billion against an offer of Sh24 billion.

Central Bank of Kenya (CBK) data shows investors also wanted a slightly higher interest rate for the 91- and 364-day T-bills than what the government gave.

The continued push for lower yields by the CBK underlined its aim to keep the costs of domestic debt low, with the total public debt having already exceeded Sh5 trillion just over a month ago.

The worst performance was by the 91-day tenor paper, which received only Sh569.78 million against an offer of Sh4 billion. The 182-day paper got Sh5.145 billion in bids, being just about half of the amount the Treasury was ready to absorb of Sh10 billion.

The one-year or 364-day tenor attracted bids equivalent to almost the entire amount floated, at Sh8.7 billion compared to an offer of Sh10 billion.

The yield for the three-month paper was 7.611 per cent, slightly higher than the 7.608 per cent reached in the previous week. The rate on the six-month paper was down to 9.083 per cent compared to 9.111 per cent of the week before while the one-year tenor was sold at a rate of 10.008 per cent, eight basis points (or 0.08 percentage points) lower than the previous auction.

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