Diamond Trust Bank banner | Coastweek



 Coastweek website


Kenya targets US $233 million dollars in 12-year bond tap sale

NAIROBI (Xinhua) -- Kenya’s Treasury on Tuesday returned to the debt market in a tap sale of this month’s 12-year bond seeking to raise an additional 233 million U.S. dollars a week after declining to pay investors a higher price on the paper.

A tap sale allows the government to sell Treasury bonds from past issues, with the securities being issued at their initial face value and coupon rate, but sold at the current market value.

In the initial sale of the 291 million dollars bond, the Treasury absorbed a paltry 58 million dollars out of bids that amounted to 340 million dollars.

This was an indication of government’s reluctance to borrow expensively especially from commercial banks, which have switched to the securities following capping of interest rates.

Money raised from the project was to be used for funding projects in roads, water and energy sectors.

The tap sale will be open from Feb. 28 to March 2, and among other things, will help mop up money left in the market during the initial sale.

“Bids shall be priced at the weighted average rate of the accepted bids (13.5 percent) for the bond auction value and adjusted for accrued interest,” said the Central Bank of Kenya Tuesday in a notice, adding the coupon rate was 12.5 percent.

Analysts noted that the government is under pressure to borrow from the domestic market to meet the high level of debt maturities, which may result in an upward pressure on interest rates.

However, it is unwilling to borrow expensively as it is ahead of its target in its domestic borrowing program, which means that it is unlikely to accept bids deemed higher than the prevailing yield-curve level.

“The government is ahead of its domestic borrowing for the current fiscal year having borrowed 1.93 billion dollars against a target of 1.5 billion dollars,” said Cytonn, a Nairobi-based investment firm. 



Kenya’s bourse key index drops below 3,000 points

NAIROBI (Xinhua) -- Nairobi Securities Exchange (NSE) benchmark 20 Share Index lost momentum Tuesday to drop 39 points and close below the psychological 3,000 points.

The index stood at 2,994.53 from a peak of 3,033.33 Monday, the highest level in recent times, after sustaining gains in the last five trading sessions.

Stockbrokers blamed Tuesday’s fall to decline in prices of major large stocks that included Safaricom, Kenya Commercial Bank (KCB), Equity Bank and Barclays Bank.

Safaricom, Kenya’s leading telecom operator, was the day’s biggest mover but traded a paltry 2.4 million shares.

As in the last three sessions, Safaricom declined, going down 0.6 percent to trade at 0.17 U.S. dollars. Monday, the telecom moved 2.1 million shares.

Mumias Sugar was the second best trader after moving 1.2 million shares at unchanged price of 0.01 dollars.

KCB, Barclays Bank and Kenya Power were the other top traded shares respectively after transacting 764,900, 521,200 and 484,100 shares, all at reduced prices.

Some 8 million shares valued at 1.4 million dollars were traded during the session, a marginal increase from 6.2 million worth 1.1 dollars in the previous session as trading remained stifled.

The All share Index (NASI) was down 0.99 points to close at 124.89 while the NSE 25 Share index closed 33.34 points lower at 3,264.53.



Remember: you read it first at coastweek.com !


TO ADVERTISE ON THIS WEB SITE:  www.coastweek.com
Please contact

MOMBASA - GULSHAN JIVRAJ, Mobile: 0722 775164 Tel: (+254) (41) 2230130 /
Wireless: 020 3549187 e-mail: info@coastweek.com

NAIROBI - ANJUM H. ASODIA, Mobile: 0733 775446 Tel: (+254) (020) 3744459
e-mail: anjum@asodia.co.ke

    © Coastweek Newspapers Limited               Tel: (+254) (41) 2230130  |  Wireless: 020 3549187  |  E-mail: info@coastweek.com