Forecast Friday
Next week Tuesday, the sale-period of the final instalment of this month’s bond auction comes to a close. To assist in your decision making, below are my expectations for the two bonds being re-opened:
- FXD2/2018/10Yr (7.0 years): average to come in between 12.45% - 12.55%, with the cut-off potentially 20bps away from the average.
- FXD1/2021/20Yr (19.7 years): average to come in between 13.55% - 13.65%, with the cut off potentially 20bps away from the average.
The CBK has set their target at KES 30Bn for this auction. The first instalment of this auction was undersubscribed, even though it was the shortest bond on offer this month. Going into this auction, my expectation would be the same; subscriptions levels would probably just match what the KES 30Bn being targeted. The greater uncertainty will be in how these papers are priced at this auction.
The T-bills this week experienced a resurgence in demand as it was well oversubscribed. The CBK rejected a portion of the bids received for the 364D T-bill in a bid to mitigate the push for higher rates by market players. Attached are the results for your perusal.
Below is a snapshot of the secondary bond space to assist you with your trading activities today. Happy hunting and a lovely weekend ahead!
|
|
| Indicative Two-Way Quotes - Benchmark Tenors |
| Benchmark Tenor |
Bid (%) |
Offer (%) |
Mov (t-t0)% |
| 1Yr |
9.80 |
9.35 |
0.00 |
| 2Yr |
10.30 |
10.00 |
0.00 |
| 5yr |
11.40 |
11.30 |
-0.02 |
| 10yr |
12.70 |
12.55 |
0.00 |
| 15yr |
13.00 |
12.80 |
0.00 |
| 20yr |
13.50 |
13.30 |
0.00 |
| 25yr |
13.70 |
13.60 |
0.00 |
|
|
| Indicative Two-Way Quotes - IFB Series |
| IFB series |
Maturity |
Bid (%) |
Offer (%) |
Mov (t-t0)% |
| IFB1/2017/7
(IFB13)
|
Nov-24 |
9.90 |
9.50 |
0.00 |
IFB1/2016/9
(IFB10) |
May-25 |
10.00 |
9.60 |
0.00 |
IFB1/2015/12
(IFB8) |
Mar-27 |
10.00 |
9.35 |
0.00 |
IFB1/2017/12
(IFB12) |
Feb-29 |
10.80 |
10.60 |
0.00 |
IFB1/2016/15
(IFB11) |
Oct-31 |
11.40 |
11.20 |
0.00 |
IFB1/2018/15
(IFB14) |
Jan-33 |
12.20 |
11.80 |
0.00 |
XIFB1/2018/20
(IFB15) |
Oct-38 |
12.00 |
11.80 |
0.00 |
IFB1/2019/25
(IFB16) |
Feb-44 |
12.50 |
12.15 |
0.00 |
IFB1/2019/16
(IFB17) |
Oct-35 |
12.25 |
12.15 |
0.00 |
IFB1/2020/9
(IFB18) |
Apr-29 |
11.10 |
10.90 |
0.00 |
IFB1/2020/6
(IFB19) |
May-26 |
10.00 |
9.70 |
0.00 |
IFB1/2020/11
(IFB20) |
Aug-31 |
12.05 |
11.90 |
0.00 |
IFB1/2021/16
(IFB21) |
Jan-37 |
12.30 |
12.20 |
0.00 |
IFB1/2021/18
(IFB22) |
Mar-39 |
12.45 |
12.25 |
0.00 |
IFB1/2021/21
(IFB23) |
Aug-42 |
12.55 |
12.45 |
0.00 |
|
|
| Key Interest Rates |
|
Mov (bps) |
| O/N Interbank |
3.6514% |
-56.03 |
| 91 Day T-bill |
7.309% |
-3.60 |
| 182 Day T-bill |
8.081% |
4.00 |
| 364 Day T-bill |
9.474% |
3.00 |
| Inflation |
5.73% |
-7.00 |
|
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