The Kenyan Treasury Bill (T-Bill) market has been a focal point for investors seeking secure and profitable investment avenues. In July 2024, the T-Bill market witnessed remarkable oversubscription rates, highlighting the growing investor confidence in these government securities.
According to the Cytonn Monthly – July 2024 report, the overall average oversubscription rate for T-Bills reached 102.6%, surpassing the 101.9% recorded in June 2024. The 91-day paper was particularly favored, with an average subscription rate skyrocketing to 352.2%, up from 343.9% in the previous month. This surge indicates a strong preference for shorter-term investments among investors.
Interestingly, the 182-day and 364-day papers saw a decline in their subscription rates, dropping to 64.8% and 40.6%, respectively. This shift suggests a strategic move by investors towards more liquid and less risky investments in the short term.
The average yields on government papers also reflected positive growth. The 364-day, 182-day, and 91-day papers saw yields decreasing by 11.7 basis points (bps), 12.4 bps, and 2.7 bps to 16.9%, 16.8%, and 16.0%, respectively. These adjustments underline the dynamic nature of the T-Bill market, influenced by various economic factors.
In terms of acceptance, the government received Kshs 123.1 billion worth of bids and accepted Kshs 105.9 billion, translating to an acceptance rate of 86.0%, slightly lower than the 93.8% acceptance rate in June. This indicates a cautious but steady approach by the government in managing its debt instruments.
The Cytonn Monthly report highlights that this oversubscription trend continued into the second consecutive week of July, albeit at a lower rate of 101.7% compared to 131.9% the previous week. The 91-day paper remained dominant, with an oversubscription rate of 371.5%, albeit lower than the previous week’s 645.3%.
Overall, the T-Bill market’s performance in July 2024 underscores the robust demand for short-term government securities in Kenya. Investors continue to find T-Bills an attractive option, balancing risk and return in a fluctuating economic environment. As the market evolves, keeping a close watch on these trends will be crucial for investors and policymakers alike.
