Happy Monday
Another auction week is upon us as the re-opened FXD1/2023/5Yr and new 10Yr bond, FXD1/2024/10Yr, end their sale period. My expectations for these bonds are as follows:
- FXD1/2023/5Yr Average: 18.40% - 18.60%, with the cut-off coming in 20 – 30bps above the average (coupon set at 16.844%)
- FXD1/2024/10Yr Average: 18.50% - 18.70%, with the cut-off coming in 20 – 30bps above the average (coupon set at 16.000%)
- Subscription: assuming the target is KES 40Bn, an undersubscription would be my expectation.
- Please do poke some holes in my above expectations so that we can all be aligned by Wednesday morning.
To guide you in your search for opportunities this week, attached is the CBK weekly report to assist in your reading of the market while updated benchmark Yield Curve levels are ready for your perusal on the attached pricelist. I have also attached the NSE Implied Yields for the NSE’s valuations of all the treasuries. To bring it all together, below is a snapshot of what is at play within the secondary market for your consideration. Happy hunting and bidding!
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