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Capital Markets

Treasury targets Sh250m as M-Akiba takers hit 460,000

National Treasury
National Treasury building in Nairobi. FILE PHOTO | NMG 

The National Treasury has re-opened the sale of Sh250 million mobile-based infrastructure bond M-Akiba, hoping to ride on the improved performance posted in March and its 460,000 subscribers.

Sale of the tax- free three-year bond started Monday and will run up to June 10 with investors being offered 10 percent in interest on investments starting from Sh3,000.

The Treasury returns to the market at a time the conventional Treasury bills requiring at least Sh50,000 are registering over-subscription, being a sign of more liquid investors.

A Sh10 billion 364-day paper sold last week attracted bids worth Sh21.05 billion, a subscription rate of 210.53 per cent. Central Bank of Kenya accepted the bids at 9.32 per cent interest.

The Treasury bill yields declined marginally during the week but total bids were Sh31.5 billion against total offers of Sh24.0 billion.

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However, Central Depository and Settlement Corporation CEO Rose Mambo noted during the launch on Monday that interest in the bond has been growing.

Since inception, the bond has attracted over 459,586 bond investors, raising Sh594.75 million since inception.

“As a continuing obligation, CDSC as the M-Akiba agent for the government of Kenya will continue to perform her role of the issuing and paying agent for the bond,” said Ms Mambo.

A similar bond issued in March raised Sh197 million, translating to a 79 percent subscription rate. The bond had been billed to offer strong competition to 364-day Treasury bill and two-year bond given that it had 18-month maturity.

The pilot sale of Sh150 million was in March 2017. It was followed by official launch sale in June 2017 targeting Sh1 billion but was undersubscribed, raising only Sh247.47 million.

The government plans to raise Sh1 billion this year from the bond, which is bought through Safaricom’s M-Pesa, Airtel Money and interbank money transfer platform PesaLink. The next sales will be in July and August, each targeting Sh250 million.

Investors using mobile network operators are allowed a maximum of Sh140,000 per day while those on Pesalink can put in maximum initial amount of Sh999,999.

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