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Capital Markets

Treasury raises Sh34bn in auction as one-year paper most sought

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

Treasury bills were oversubscribed last week, boosted by the uptake of the six-month and one-year tenors.

The Central Bank of Kenya (CBK), the Treasury's fiscal agent, had advertised a total of Sh24 billion for the 91-, 182- and 364-day tenors but received nearly double this amount.

A total of Sh34.97 billion was accepted from investors who had offered Sh47.72 billion.

Outlook

The 182- and 364-day papers saw a subscription rate of an average of 90.58 percent and 359.33 percent respectively while that of 91-day was at 68.39 percent.

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The lower yield on the three-month paper is mainly attributable to a low-interest rate environment being experienced since the passing of the law capping interest rates.

Interest rates

Analysts expect this to continue in the short-term, given CBK's stabilisation of interest rates in the auctions marked by rejection of aggressive bids for both Treasury bills and bonds.

The 91-day paper attracted bids worth Sh2.7 billion against a total amount offered of Sh4 billion.

The Treasury accepted Sh2.73 billion from investors.

In the 182-day paper, investors had offered Sh9 billion against an offer of Sh10 billion. The Treasury accepted Sh5.6 billion.

In the 364-day auctions, the Treasury accepted a total of Sh26.6 billion from Sh35.9 billion against an offer of Sh10 billion.

The yield on the 91-day paper stood at 7.69 percent, while the 182-day and 364-day paper had 8.2 percent and 9.4 percent yields respectively.

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