Investors swarm Kenya's Treasury with funds as T-bill yields surge

Investors' appetite for Kenya's Treasury bills has swelled as interest rates on the three months to one-year securities rose for the third straight time in this week's auction.

Yields on the 91, 182 and 364 days securities had fallen to between 7 percent and 10 percent at the end of last month, making investors slow down subscription.

However, in the last three auctions, the rates have been on an upward trend to stand at between 8 percent and 11 percent.

The rise has drawn investors to the debt market, swarming Treasury with funds more than it calls for every week.

In this week's auction, Treasury offered 182 day bills worth 59 million U.S. dollars and received bids worth 108 million dollars, representing a subscription of 182 percent. The Central Bank of Kenya (CBK) accepted bids worth 66 million dollars.

"The weighted average rate of accepted bids, which will be applied for non-competitive bids, was 10.32 percent," said the CBK Thursday. At the end of October, the rate stood at 10.1 percent.

Similarly, 59 million dollars worth of 364-day Treasury bills were put on sale this week. "The total number of bids received amounted to 91 million dollars representing a subscription of 152 percent," said the CBK, which accepted bills worth 71 million dollars.

Last week, interest rate on the indicative 91-day bill stood at 8.23 percent from 8.11 percent and it is expected to rise further this week when CBK announces results Friday.

However, according to the apex bank, investors are mainly going for the 182 and 364 days bills due to the high yields. Endit