NAIROBI, April 14 (Xinhua) -- Investors in search of higher returns at Kenya's debt market have swamped the short-term papers with bids, making the Central Bank reject a huge number of them.
They are mainly targeting the 91-day and 364-day papers, which are offering the best returns on a risk-adjusted basis, according to analysts.
This week, the Central Bank offered 91 and 364 days Treasury bills worth a total of 194 million U.S. dollars, 97 million dollars for each.
"The total number of bids received amounted to 123 million dollars representing 127 percent subscription for the 91-day bill and 103 million dollars representing 107 percent subscription for 364 days bills," said the Central Bank in auction statistics Friday.
Bids accepted amounted to 83 million dollars for the 91 days and 101 million dollars for the 364 days Treasury bills at an interest rate of 8.7 percent and 10.9 percent respectively.
Last week, subscription rates for the 91 and 364 day papers came in at 125 percent and 173 percent for the 194 million dollars offered, rising from 112 percent and 133 percent in the previous week.
Analysts at Cytonn, a Nairobi-based investment firm, noted that investors are going for the short-term papers due to uncertainty in the interest rate environment following increased government borrowing, which is exerting upward pressure on yields, thus the long term papers are not offering investors the best returns on a risk-adjusted basis.
