Underlining healthy investor demand for government securities, all Treasury bonds auctioned thus far in the FY 2021/21 (July 2021 to June 2022) have been oversubscribed save for the Tap sale earlier in the cycle. Favourable subscription may be linked to the availability of excess funds amid limited investment outlets during this pandemic. Moreover, elevated credit … Continue reading Kenya: Treasury Bond Performance for FY 2021/2022
Kenya’s national accounts were rebased reflecting a new benchmark year of 2016, from 2009 previously, in a bid to use data that was more representative of the economy in terms of size and structure. The change in base year aligns with the United Nations Statistical Commission’s recommendations to rebase national accounts every five years. As … Continue reading Kenya: Rebased National accounts to positively impact sovereign debt metrics (Summary)
Succession politics continue to dominate news headlines at a time when Kenya’s economic recovery is being threatened by rising COVID-19 infections as well as mutant variant strains. Latest COVID-19 data suggests that the positivity rate is progressively steadying towards double digit territory while risks from new variant strains has forced the government impose a 14-day … Continue reading Kenya: Amplified government debt appetite to maintain upturn in yields as threats from COVID-19 persist.
Kenya’s economic recovery seems well underway. Private sector activity has improved, mobility indicators reveal an uptick in movement and it seems that the Kenyan population is slowly returning to some kind of normalcy. As a result, the economy could expand by between 5.50% and 6.00% in the full year 2021 although this largely reflects a … Continue reading Kenya: Threats to COVID-19 rollout and yield curve play in focus
The 16-year infrastructure bond (IFB) sale really surprised me! A whopping KES 125.34Bn in bids was received against the KES 50.00Bn targeted. The CBK successfully absorbed KES 81.05Bn. Pricing was within expectations with the weighted average rate of accepted bids recorded at 12.257%. What we can learn from this auction is: 1. There is a … Continue reading Kenya: Lessons from the Inaugural Infrastructure Bond Auction of 2021
Since Patrick Njoroge’s tenor as Governor of the Central Bank of Kenya (CBK), the decision to ease monetary policy has been against a backdrop of stable macroeconomic conditions. Moreover, the need to enhance private sector credit growth appears to be a key reasoning to ease policy with the quantum linked to the need to avoid … Continue reading Kenya: Could the CBK be jumping the gun with a policy rate cut?
The month of October ended on a high as indications of a post-interest rate cap era improved investor risk appetite. Bank stocks rallied for the second consecutive week, rising by close to 26.00% on average as prospects of increased lending and profitability anchored investor sentiments. Adjustments to the yield curve, as a result of a rate cap … Continue reading Kenya: Rate cap repeal boosts investor risk appetite
Investors may enhance their exposure to lower duration bonds as the uncertain interest rate environment portends a big effect on bond portfolios. Following the President’s recommendation to repeal the law capping interest rates, investors are priming themselves for the possibility of higher interest rates. Coupled with the government’s bigger debt load, given the under-performance in revenues, … Continue reading Kenya: Prospects of interest rate cap repeal to elevate appeal for lower duration bonds
The economy recorded modest growth in the first half of the year as signaled by softening economic indicators. The Composite Index of Economic Activity (CIEA) exhibited lethargic expansion while the Business Tendency Index (BTI) slowed signaling some slack in economic activity. The softening trend may be attributed to constrained performance of the agriculture sector, which … Continue reading Uganda Market Recap: August 2019
After a slow start to the year, the economy may be perched on a moderate path to recovery. The economic momentum towards the end of the year could improve thanks to an expected rebound in agriculture following indications of improved weather that will be complemented by a revival in government spending. While this may support … Continue reading Kenya Market Recap: August 2019