Investors push up uptake of Kenya's Treasury bills

Investors are back at Kenya's debt market after a five-week hiatus, with Treasury bills offered for sale receiving up to a 300-percent subscription.

For the second week running, the investors have swarmed the Central Bank of Kenya (CBK) with bids, mainly targeting the 182-day paper that is offering higher returns compared to the 91-day and 182-day bills.

In this week's auction, the CBK put up for sale 182- and 364-days bills worth 58 million U.S. dollars for each of the security.

"The total number of bids received amounted to 172 million dollars representing 299-percent subscription and 60 million dollars accounting for 137-percent subscription for 182- and 364-days bills, respectively," said the CBK in auction data released Thursday.

The government's appetite for debt surged with the increased subscription. The apex bank accepted bids amounting to 145 million dollars for the 182-day paper and 59 million dollars for the 384-day bill at a rate of 10.5 percent and 10.9 percent respectively. The yields remained nearly flat for both securities.

"The 182-day paper continues to offer the highest return on a risk-adjusted basis, as evidenced by the higher subscription levels on the paper," noted Cytonn, a Nairobi-based investment firm, adding that there has been increased liquidity in the market.

Last week, Kenya raised 229 million dollars from Treasury bills despite the government being in the market to raise 154 million dollars.

Most of the money (154 million dollars) was raised from the 182-day paper which during the auction registered a 256-percent subscription.

Subscription for the 91-day bill, however, remains flat, standing at 93.4 percent last week. Endit