Capital Markets

Treasury snubs investors’ Sh43 billion at weekly T-bill auction

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

Treasury bills subscription hit Sh62.26 billion at the weekly auction with the Central Bank of Kenya (CBK) accepting about a third at Sh18.34 billion, turning away Sh43 billion.

The 364-day paper continued to get the most interest, receiving bids worth Sh34.58 billion — a 345.87 per cent subscription rate — as investors sought to lengthen investment duration. CBK accepted just Sh10.8 billion from the paper.

CBK seems to be avoiding an uptick in rates at the tail end of the current financial year as yields continue declining at the weekly auction.

Earlier in the week, analysts had expected a lot of the liquidity to go into the auction and a significant drop in the rates.

“Treasury bill auction numbers showed a drop in interest rates with the 91, 182 and 364 days being 7.85 per cent, 10.061 per cent and 10.949 per cent compared to the previous weeks’ 7.938 per cent, 10.196 per cent and 11.083 per cent respectively,” said analysts at Genghis Capital in a note.

The 182-day paper also caught investors’ eyes, receiving bids worth Sh22.16 billion against an offer of Sh10 billion, a 221.64 per cent subscription rate. The government only accepted Sh3.98 billion.

The 91-day paper received bids of Sh5.51 billion against an offer of Sh4 billion, recording a subscription rate of 137.94 per cent. The government accepted Sh3.55 billion.

The acceptance rate continued to decline due to the government cutting down on local borrowing since it is ahead of the curve at Sh297.03 billion at end of May against Sh269.32 billion pro-rated target.