T-Bills Still Undersubscribed For The Second Week Running

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T-Bills have remained in the red for the second week running despite the high liquidity in the money markets during the week.

T-bills remained undersubscribed, with the subscription rate coming in at 84.1 percent, up from 49.6 percent the previous week, mainly supported by the relatively high liquidity in the money markets.

The highest subscription rate was in the 91-day paper, which came in at 180.7 percent, up from 68.5 percent recorded the previous week.

The subscription for the 182-day paper also rose to 76.0 percent, from 31.6 percent recorded the previous week, while that of the 364-day paper declined to 53.5 percent from 60.0 percent recorded the previous week.

The yields on the 91-day and 364-day papers remained unchanged at 6.3 percent and 7.6 percent, respectively, while that of the 182-day paper increased marginally to 6.7 percent, from 6.6 percent the previous week.

The acceptance rate increased to 92.6 percent, from 91.8 percent recorded the previous week, with the government accepting 18.7 billion shillings, out of the 20.2 billion shillings worth of bids received.

Money Markets

In the money markets, 3-month bank placements ended the week at 7.2 percent, while the yield on the 91-day T-bill remained unchanged at 6.3 percent.

The average yield of Top 5 Money Market Funds declined marginally to 10.0 percent, from 10.1 percent previously. The yield on the Cytonn Money Market remained unchanged at 10.6%, similar to what was recorded the previous week.

The money markets remained liquid during the week, with the average interbank rate declining to 2.6 percent, from 3.1 percent recorded the previous week, mainly supported by government payments.

The average interbank volumes increased by 14.3 percent to 12.8 billion shillings, from 11.2 billion shillings recorded the previous week.

Eurobonds

During the week, the yields on Kenyan Eurobonds increased across the board, pointing towards an increased perception of risk for the country.

According to Reuters, the yield on the 10-year Eurobond issued in June 2014 increased marginally by 0.1% points to 5.5 percent, from 5.4 percent the previous week.

During the week, the yields on the 10-year and 30-year Eurobonds both increased marginally by 0.1 percentage points to close at 6.7 percent and 8.0 percent, respectively from 6.6 and 7.9 percent recorded the previous week.

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