This archive report was first published on 20 June 2020.
On June 20, 2020, the Central Bank of Kenya (CBK) received bids worth Sh13.4 billion for the 91-day government paper, against an offer of Sh4 billion. This high subscription comes against a backdrop of declining yields, indicating that investors are prioritizing the security offered by government securities over returns.
Investors will receive a return of 7.089 per cent on the T-bill, compared to 7.25 per cent given for the 91-day paper auctioned the previous week. The 364-day Treasury bill also attracted bids of Sh18.8 billion against an offer of Sh10 billion, with Treasury set to pay 8.66 per cent for this paper.
The subscription for the three short-term papers - 91, 182, and 364 days - was 188 per cent, with the six-month bill receiving the lowest subscription of 130 per cent. The five and 10-year Treasury bonds that CBK re-opened were oversubscribed by 262 per cent, as liquid investors sought secure investments.
The five-year bond with a maturity date of December 9, 2024, received bids worth Sh60.9 billion, while the 10-year bond attracted total bids of Sh44.2 billion. Close to half of the bids, Sh49 billion, were accepted, with the government expected to pay an interest of 11.49 per cent for the five-year T-bond and 12.28 per cent for the 10-year bond that will mature in November 12, 2029.
