Investors’ appetite for this month’s Sh40 billion 10-year Treasury bond is expected to be high due to the pent-up demand in the market that has been starved of short-to-medium term papers in the last three auctions, analysts say.
Treasury will also be looking for a better performance after a sub-par performance in the previous bond sold in July — a 20-year Sh40 billion offer — that netted just Sh10.5 billion.
“Most of the participants have liabilities in the short-to-medium term space and thus would seek similar assets to match their liabilities exposure,” said Mr Churchill Ogutu, a macroeconomic and fixed income analyst at investment bank Genghis Capital.
The bond is on sale until August 21, with a market determined coupon that is likely to see some investors chance their hand at higher price bids.
The bond is however being sold at a time when the market is experiencing tight liquidity, which could weigh in on the amount of bids coming in.