T-bills bids off target, investors focus on long-term securities

The Treasury bill auction remained undersubscribed last week as investors eye this week’s bond auction whose sale concludes tomorrow.

Central Bank of Kenya (CBK) said on Thursday that it had received bids worth Sh20.18 billion against its target of Sh24 billion at the weekly auction.

The financial regular, who is also the government’s fiscal agent, accepted a total of Sh18.69 billion, out of which Sh14.44 billion went towards settling maturities. Although this is the fifth straight week of undersubscribed Treasury bill sales, the yields on the three tenors of 91, 182 and 364-days have been little changed over the period, partly due to limited pressure on the government to borrow heavily on short term paper due to good performance of bond auctions.

The yields on the 91-day paper stood at 6.27 percent in the latest auction, compared to 6.2 percent five weeks ago.

On the 182-day T-bill, the yields have gone up from 6.56 percent to 6.69 percent in the period, while the 364-day T-bill has seen its rate rise marginally from 7.52 percent to 7.56 percent in the past five weeks.

Tomorrow, the government will conclude the sale of this month’s Sh50 billion bond, which has been offered in a triple-tranche with periods to maturity ranging from 5.3 years to 14.5 years , which makes it more attractive to investors across the spectrum.