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.
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
from the project was to be used for funding projects in roads, water and energy
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.
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.
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.
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.
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
-- Nairobi Securities Exchange (NSE) benchmark 20 Share Index lost momentum
Tuesday to drop 39 points and close below the psychological 3,000 points.
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.
blamed Tuesday’s fall to decline in prices of major large stocks that included
Safaricom, Kenya Commercial Bank (KCB), Equity Bank and Barclays Bank.
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.
was the second best trader after moving 1.2 million shares at unchanged price of
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.
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.