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Kenya cancels 182-day T-bill auction amid high performance

Xinhua, March 2, 2017 Adjust font size:

Kenya's Treasury has suspended the sale of 182-day bill for the auction dated March 13 to keep away investors targeting it for higher yields.

The Treasury bill was massively oversubscribed for the fifth week running this week despite its yields falling slightly as its peers, the 91-day and 364-day, continued to perform poorly.

As in the previous week, the Central Bank of Kenya (CBK) in this week's auction put up for sale bids worth 58 million U.S. dollars for the 182-day paper.

"The total number of bids received amounted to 234 million dollars, representing a 403-percent subscription," said the apex bank in auction data Thursday.

CBK accepted 200 million from investors at an interest of 10.525 percent, a slight drop from 10.529 percent.

Last week, the bank received bids that amounted to 240 million dollars representing a 412-percent subscription for the paper.

The high performance of the paper, according to analysts, pushed CBK to suspend its sale as it sought to cut back on expensive loan and divert investors' attention to the other securities that have for the last five weeks remained undersubscribed.

"There will be no auction for the 182-day Treasury bill for the value date 13-03-2017," said CBK in a notice Thursday.

According to Cytonn, a Nairobi-based investment firm, investors' preference at the debt market has been more skewed towards the 182-day paper as it continues to offer investors higher returns on a risk-adjusted basis.

This week, the 364-day paper managed a subscription of 57 percent, with bids amounting to 32 million dollars. Last week, the bill raised 9.6 million dollars representing a 18-percent subscription. Endit