Kenya T bills yields jump

July 19, 2009
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, NAIROBI, Kenya, Jul 19 – The Government securities market posted a performance rate of 78.6 percent during the 91-day Treasury bills at July 16 auction, Central Bank of Kenya (CBK) has said.

The average bills interest rate for the 91-day Treasury went up 8.6 basis points, from 7.178 percent in the Treasury bills auction of the same security on July 6, 2009 to 7.264 percent during the current week\’s auction.

"The Government offered for sale Treasury bills worth Sh6 billion and received bids totaling Sh4.7 billion. Proceeds of the auction were to be used to meet the cost of rolling over Treasury bills maturities amounting to Sh5.9 billion," a statement from CBK said.

Consequently, the 12-week moving average interest rate for the 91-day Treasury bills increased from 7.357 percent to 7.364 percent while the average inter-bank interest rate remained the same at 2.54 percent in the week ending July 17, 2009.

The number of deals declined from 412 to 383 during the week as the average volume of transactions decreased from Sh59.9 billion to Sh50 billion, reflecting an easing of liquidity in the banking system.

Money Market

CBK said the Kenya Shilling weakened against all the major international currencies during the week ending July 17, 2009.

"Against the US dollar, the shilling weakened to close the week Sh77.19 compared to Sh76.69 per US dollar in the previous week, mainly due increased corporate demand. The average inter-bank interest rate remained stable at 2.54 percent in the week ending July 17, 2009," CBK said.

Official usable foreign exchange reserves held by the Central Bank stood at $3,062 million (equivalent to 3.48 months of imports) as at July 17, 2009, down from $3,269 million (equivalent to 4.54 months of imports) as at July 17, 2008.

The decline in import cover reflected decline in the level of reserves and increased import bill.

Foreign exchange reserves held by the commercial banks, predominantly use by the private sector to meet external financial obligations decreased from $2,341 million as at end June 2008 to $1,602 million as at end June 2009. Liquidity in the money market improved in the week ending July 17, 2009 reflecting liquidity injection by the Central Bank amounting to Sh7 billion using the reverse repurchase agreement securities.

Official usable foreign exchange reserves held by the Central Bank stood at $3,062 million (equivalent to 3.48 months of imports) as at Friday, July 17, compared with $3,269 million (equivalent to 4.54 months of imports) as at July 10, 2008.

Equity Market

Equity turnover declined by 31 percent as stocks worth Sh573.0 million were traded compared with Sh826.8million traded in the previous week. The number of shares traded decreased, from 76.4 million in the previous week to 60.8 million shares in the week under review.

Market capitalization as a measure of total shareholders wealth decreased by 1 percent or Sh8.1 billion to Sh 824.0 billion in the week under review from Sh832.1 billion in the previous week, reflecting reduced prices in most stocks during the week.

The NSE 20 Share index lost 55.8 points to settle at 3256.8 points on July 16, 2009 from 3312.6 points on July 09, 2009. The Nairobi All Share Index also lost 7 points to settle at 71.2 points by July 17, 2009.

The Commercial and Services sector traded 37 million shares and accounted for 61 percent of the total traded volume. Safaricom traded 35.1 million shares to be the most active stock in the sector.

The Finance and Investment sector traded 17.2 million shares and accounted for 28 percent of total traded volume. Equity Bank and Co-operative Bank traded 10.4 million and 3.5 million shares respectively and were the most active counters in the sector.

The Industrial and Allied sector traded 5.4 million shares and accounted for 9 percent of the total traded volume. Mumias and KenGen were the most active counters and traded Sh3.5 million and Sh9 million shares, respectively.

Bond market trading improved at the Fixed Income Securities Market during the week. Bond turnover increased as bonds worth Sh1.8 billion were traded compared with Sh1.7 billion traded in the previous week.

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