In a notable financial achievement, the Central Bank of Kenya (CBK) has surpassed expectations by collecting KSh 11.76 billion in its second January Treasury Bonds tap sale, despite seeking KSh 15 billion. The bank floated both three-year and five-year treasury bonds during this auction, reflecting a strategic move to diversify its portfolio.
This recent foray into the treasury bonds market marks CBK’s second appearance, following the issuance of two similar tenure T-bonds valued at KSh 35 billion between December 2023 and January 2024. The January tap sale, which occurred between January 16th and 18th, attracted substantial investor interest.
Bids submitted during the auction were evaluated based on the average rate of accepted bids, utilizing the treasury bond auction value dated January 15th. The three-year T-bond emerged as the most attractive, accumulating bids worth KSh 9.4 billion at an enticing coupon rate of 18.4%. In comparison, the five-year T-bond received bids amounting to KSh 2.6 billion, with CBK accepting KSh 2.4 billion at a coupon rate of 16.8%.
In light of the successful auction, investors who participated have been directed to obtain detailed information on amounts payable for their successful bids. This information will be available on the DhowCSD Investor Portal/App under the transactions tab starting Friday, January 19th, 2024. The payment deadline for successful bids has been set for 2:00 pm on Monday, January 22nd, 2024.
Additionally, at this week’s treasury bills auction, the CBK experienced significant demand, accepting KSh 34.1 billion out of the KSh 24 billion on offer. This oversubscription reached 146.99%, indicating a robust market response. Notably, the CBK’s strategic efforts to increase returns to investors in the government paper market have positioned rates firmly above the 16% range, contributing to a positive outlook for the financial sector.
By: Delino Gayweh
Serrari Financial Analyst
January 22, 2023
