Sharp Daily
No Result
View All Result
Thursday, June 5, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home Investments

Investors flock to 91-day T-Bills as market volatility rises

Joshua Otieno by Joshua Otieno
December 4, 2023
in Investments
Reading Time: 2 mins read

In 2022, government treasury bill subscription rates exhibited notable variations, averaging 121.3%. The 91-day paper led with an average subscription rate of 226.9%, followed by the 364-day at 69.7%, and the 182-day paper at 67.2%.

This year, significant shifts have occurred, resulting in an overall year-to-date average subscription rate of 205.3%. Remarkably, the 91-day paper saw a substantial increase, soaring to 534.9%, marking a 308-point surge from the previous year. Conversely, the 182-day and 364-day papers experienced declines of % and 56.2%, reaching 50.4% and 30.5%, respectively.

Yields on government papers concluded the previous year at 9.4%, 9.8%, and 10.3% for the 91-day, 182-day, and 364-day papers. Presently, these rates stand at 15.5%, 15.6%, and 15.7%, demonstrating uniform increases. Despite this, the subscription rates have skewed heavily toward the 91-day paper. This article delves into the reasons behind this phenomenon and its implications for the economy.

Investors, perceiving the Kenyan market as volatile, have adopted risk-averse strategies in government investments. Fluctuations in Kenyan macros, including consistent currency depreciation, soaring inflation, and a concerning debt situation, justify investors’ risk-averse stance. The 91-day paper’s nimble nature serves as a strategic shield, offering flexibility to swiftly adjust portfolios in response to unpredictable market movements.

RELATEDPOSTS

Importance of investing in bonds

December 18, 2024

Kenya’s currency and dollar bonds weaken due to protests

July 18, 2024

Additionally, longer-term papers are sensitive to interest rate fluctuations, prompting cautious investors to reallocate assets in anticipation of potential increases in long-term rates. The Central Bank Rate, currently at 10.5%, up from 8.75% in January, reflects a response to inflationary pressures. Investors, uncertain about projecting future interest rates, prefer short-term bills for their adaptability and quicker readjustment to changing rates compared to long-term papers.

Liquidity considerations also play a role, as short-term instruments allow investors to swiftly convert investments into cash, providing a safety net in unpredictable economic environments. This ties in with the concept of opportunity cost, where rising short-term rates make short-term bills more attractive for reinvestment at higher rates in the future.

Despite this trend, the government has successfully secured funds from the domestic market to meet budgetary requirements, albeit at a higher cost and for shorter periods compared to the previous year. Investor behavior remains intriguing, and the balancing act between risk and returns is expected to persist as investors navigate decision-making processes.

Previous Post

Kenya moves to regulate cryptocurrency amid market boom

Next Post

Zoning laws and tax codes: How policy impacts property

Joshua Otieno

Joshua Otieno

Related Posts

Investments

Decoding stock-based compensation

June 4, 2025
Investments

Navigating the money market and fixed income funds landscape

June 3, 2025
Investments

Foreign influence in Kenya’s credit crisis

May 28, 2025
Investments

SACCO’s at the heart of rural financial inclusion in Kenya

May 22, 2025
Investments

Real yields vs. nominal yields on Kenya’s government bonds

May 21, 2025
Investments

Knight Frank: Kenya’s wealthy swap mansions for market moves

May 19, 2025

LATEST STORIES

How Kenyan banks can modernize without marginalizing

June 4, 2025

Human rights concerns over activists’ treatment in Tanzania

June 4, 2025

Decoding stock-based compensation

June 4, 2025

Comparative advantage is the secret to real economic take off

June 4, 2025

Understanding inflation and its impact on everyday life

June 4, 2025

Economic reforms are costly

June 3, 2025

Cytonn Income Drawdown Fund (CIDDF)

June 3, 2025

Navigating the money market and fixed income funds landscape

June 3, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024