Analysts suggest the Sh250 million M-Akiba infrastructure bond, offering a 10% return after six months, could attract significant public interest amid declining Treasury bill yields. The bond, reopened for a 10-day sale ending Friday, matures in 2020 and is marketed through mobile platforms.
The Treasury's decision to reissue the tax-free bond follows a 2017 initiative making Kenya the first nation to raise funds via mobile infrastructure bonds. However, a prior Sh4.85 billion offering in 2018 underperformed, raising only Sh247.47 million despite 303,534 registrations.
Churchill Ogutu, a Genghis Capital analyst, noted Treasury bills maturing in one year averaged 9.48% in March 2019, the lowest since July 2013. Six-month T-bills yielded 8.32%, below the M-Akiba bond's rate. Commercial banks also reduced savings interest rates to under 6% after September 2018 policy changes.
Despite its potential, the bond's 2018 launch faced challenges including election-related investor caution and inadequate marketing. The Nairobi Securities Exchange and Central Depository and Settlement Corporation pledged to intensify outreach this week to boost participation.
Survey data from FSD Africa revealed 51% of M-Akiba investors in 2017-2018 were based in Nairobi, with 61.4% being salaried individuals. The Treasury plans additional Sh250 million offerings in May, July, and August 2019, aiming to reach a Sh1 billion target this year.
