Yesterday the Central Bank of Kenya (CBK) auctioned 182 day Treasury bills worth KES 2 billion. The CBK received 182 bids worth KES 3.34 billion but only accepted bids worth KES 1.94 billion. The security exhibited a subscription rate of 167%, following the oversubscription trend we have observed at previous auctions.

The weighted average yield of accepted bids stood at 12.078%. This is 0.998% lower than the yield of 13.076% observed at the previous auction.

The results of the auction are summarised below:

[caption id="attachment_7221" align="alignleft" width="780" caption="Image sourced from www.centralbank.go.ke"][/caption]

[caption id="attachment_7223" align="alignleft" width="774" caption="Image sourced from www.centralbank.go.ke"][/caption]

In subsequent auctions we may observe the following:

• The subscription rate on the government securities may fall marginally as investors become aware of the high rejection rates the CBK is exhibiting.
• The number of accepted bids may increase as the CBK tries to lock in investors and inject more Kenya shillings in the economy to increase money supply and somewhat stabilise the shilling.
• The yields on the securities may increase. This will attract investors, both local and foreign, in later auctions.