The weekly Treasury bills auction was undersubscribed for the fourth straight week on the back of lower liquidity in the money market and investor preference for better yielding Treasury bonds.
Investors offered Sh11.90 billion against a target of Sh24 billion in the auction.
Central Bank of Kenya (CBK) accepted bids worth Sh10.93 billion with yields on the 91, 182 and 364-day papers going up by 0.2 to 4.7 basis points, to 6.295 per cent, 6.627 per cent and 7.554 per cent respectively.
The weekly Treasury bills auction was undersubscribed for the fourth straight week on the back of lower liquidity in the money market and investor preference for better yielding Treasury bonds.
Investors offered Sh11.90 billion against a target of Sh24 billion in the auction.
Central Bank of Kenya (CBK) accepted bids worth Sh10.93 billion with yields on the 91, 182 and 364-day papers going up by 0.2 to 4.7 basis points, to 6.295 per cent, 6.627 per cent and 7.554 per cent respectively.
Stronger demand was seen on the one year paper bill that attracted Sh6 billion worth of bids against a target of Sh10 billion, while the Sh4 billion 91-day paper was the least popular with bids worth Sh2.7 billion.
The falling demand for the short-term government securities is likely to lead to upward pressure on yields in upcoming auctions.
The T-bills undersubscription has also been linked to investors’ appetite for bonds, which are offering more attractive yields and also have short term paper on offer.
Treasury on August 31 re-opened two 15-year bonds— one first sold in 2010 and another whose initial sale was in February— and a 20-year paper first sold in 2011, with the sale targeting Sh50 billion to run until September 15. The papers carry coupons of nine per cent, 10 per cent and 12.76 per cent.
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