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Capital Markets

T-bill investors bid Sh24bn with yields on the uptick

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

The uptake of Treasury bills has begun to gain traction as investors go back to short-term government securities.

The latest Central Bank of Kenya (CBK) data shows investors bid Sh24.09 billion against advertised Sh24 billion, representing 100.37 per cent performance.

The 91-day T-bill was oversubscribed as investors preference also tilted to the one-year note, bidding Sh7.67 billion and Sh11.93 billion against targeted Sh4 billion and Sh10 billion respectively. The CBK accepted bids worth Sh23.98 billion.

The uptake of the bills is seen rising in the next auctions as the government continues to raise the yields with its borrowing needs increasing.

The yields have been rising marginally from previous auctions to 7.266 percent, 8.192 percent and 9.173 billion for the 91-, 182- and 364-day notes.

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The government has been increasing debt bids to finance fiscal stimulus measures undertaken to cushion the country from the Covid-19 pandemic amid falling tax collections.

While the surge in the borrowing, in the beginning, had been focused on the shorter-term bills, the Treasury has now shifted financing to longer-dated securities coupled by external borrowing.

On Tuesday, the government reopened the five-year fixed coupon bond issued on May 5 to plug the shortfall from the original issue, which targeted to raise Sh50 billion but only managed to raise Sh20.78 billion from the investors.

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