Treasury-bill auction subscription eases but expected to resume

Treasury bills subscription eased slightly in the last weekly auction with an overall performance of 126.01 per cent as attention tilted more towards 364-day and 91-day tenors.

Central Bank of Kenya (CBK) received bids worth Sh30.24 billion against an offer of Sh24 billion, with the Treasury agent accepting Sh26.77 billion.

Yields increased 0.8 basis points (bps) to 7.733 per cent on the 91-day tenor and 4.9bps to 10.488 per cent on the 364-day tenor.

Analysts said the 364-day tenor provided better returns and therefore an obvious preferred investment as opposed to the six-month tenor.

“With tax obligations having been sorted last week and earlier this week, liquidity is improving and as such there is even likelihood of higher subscriptions in the weeks to come irrespective of the declined bill rates,” said Stanslaus Kimani, a fixed income dealer at NIC Securities on Friday.

Equally, Mr Kimani said there has not been very interesting offers in the primary bond auction - 25 years June issue, leaving Treasury bills the only option.

“This could tilt the subscription though if a short paper is issued in July,” said Mr Kimani.

The 364-day tenor recorded a 198.91 per cent performance rate after receiving bids worth Sh19.89 billion against an offer of Sh10 billion, with CBK accepting Sh17.41 billion from investors.

The 91-day recorded 114.95 per cent subscription rate attracting bids worth Sh4.59 billion against an offer of Sh4 billion. CBK accepted Sh3.61 billion.