Feature of the week:
CBK Invites Bids for FXD3/2019/10 and FXD1/2018/20 (Re-opened) and FXD1/2021/21 Treasury Bonds
The Central Bank of Kenya (CBK), acting in its capacity as fiscal agent for the Republic of Kenya, has invited bids for two re-opened 10 and 20 year treasury bonds FXD3/2019/10 and FXD1/2018/20 respectively and a newly issued FXD1/2021/20 bond with the intention of raising KES 60.0 billion for budgetary support.
The features of the bonds are shown in the table below:
| FXD3/2019/10 | FXD1/2018/20 | FXD1/2021/20 | |
| Amount | KES 60.0 billion | ||
| Tenor | 8.1 years | 16.7 years | 20.0 years |
| Coupon rate | 11.517% | 13.200% | Market determined at auction |
| Taxation | 10.0% | 10.0% | 10.0% |
| Period of sale | 26/07/2021 to 10/08/2021 | ||
| Redemption date | 06/08/2029 | 01/03/2038 | 22/07/2041 |
Source: CBK
- We recommend bidding as follows:
- FXD3/2019/10: 11.90% to 12.05% (non-aggressive): 12.10% to 12.30% (aggressive)
- FXD1/2018/20: 13.10% to 13.25% (non-aggressive): 13.30% to 13.40% (aggressive)
- FXD1/2021/20: 13.10% to 13.30% (non-aggressive): 13.35% to 13.55% (aggressive)
Equities Market Summary:
Nairobi Securities Exchange Performance
The All Share Index (NASI) rose by 0.6% w/w while the NSE 20 remained flat to close the week at 178.50 and 1,974.46 respectively characterized by a decline in both market turnover(11.9% to KES 1.5 billion) and number of shares traded(18.0% to 45.3 million shares). There were notable price gains on Stanbic (8.8% w/w to KES 92.50), CIC (4.7% w/w to KES 3.10), ILAM Fahari IREIT (3.6% w/w to KES 6.98), KCB (2.3% w/w to KES 46.75), Equity (2.2% w/w to KES 50.00) and Standard Chartered (1.2% w/w to KES 131). Safaricom also edged up by 0.4% w/w to KES 42.10 on reports that its current Ethiopia license maybe upgraded to include mobile money services. There was however caution as Ethiopia is also expected to issue a second mobile license(which means more competition).We expect a sustained upward price momentum on banking counters (ahead of the 1H2021 results) albeit at weaker pace(profit taking activities will likely creep in leading to higher supply).
*We are currently updating our recommendations