Kenya’s Treasury bills remained oversubscribed for the second consecutive week, underscoring sustained investor demand for government securities despite mixed movements across tenors.
Data from the latest auction shows the overall subscription rate rose to 130.3 percent, up from 108.0 percent recorded the previous week. In total, bids worth KShs 31.3 billion were received against the amount on offer, reflecting continued liquidity in the market.
However, investor appetite shifted away from the shorter 91-day paper. The tenor attracted bids worth KShs 4.3 billion against an offer of KShs 4.0 billion, translating to a subscription rate of 108.5 percent. This marked a sharp decline from the 158.2 per cent subscription rate recorded in the previous auction.
The 182-day Treasury bill also saw reduced demand, with its subscription rate easing to 96.1 percent from 112.9 percent a week earlier, indicating a more cautious stance among investors toward the medium-term paper.
In contrast, demand for the longer-dated 364-day paper strengthened significantly. The subscription rate surged to 173.2 percent, more than doubling from 83.0 percent recorded in the previous week, signaling growing investor preference for locking in yields over a longer horizon.
The government accepted KShs 26.2 billion out of the KShs 31.3 billion in bids received, representing an acceptance rate of 83.7 percent.
Yields on the government securities posted marginal and largely stable movements. The yield on the 182-day paper remained unchanged at 7.8 percent, while yields on the 91-day and 364-day papers edged lower by 0.1 and 0.5 basis points, respectively, to settle at 7.7 percent and 9.2 percent.
The results indicate sustained investor confidence in government paper, with a notable shift toward longer-term instruments amid expectations of stable or easing interest rates.
Related Content: How Market Volatility Is Shaping Reforms In African Capital Markets
