Nairobi Securities Exchange(NSE) Activity as well as the subscription levels at the Weekly Treasury Bills Auction, is expected to be low this week.
This is as local and foreign investors shift their focus from the NSE and T-Bills to the upcoming 19-year infrastructure Bond Auction slated for Wednesday, 16th February 2022.
Central Bank of Kenya(CBK) is looking to raise KSh 75.00Billion for funding of infrastructure projects in the 2021/2022 budget by issuing this infrastructure bond.
The amortized bond will have a market determined coupon rate with bidding which opened on 31st January 2022 and ends at 2.00pm on 15th February 2022 while the Auction date is February 16th, 2022.
The minimum bid amount is KSh 100,000.00
Investment Banks expect the infrastructure bond to be oversubscribed due to the tax-free nature of the bond.
Additionally, prevailing political and pandemic related risks, has seen investors prefer longer
dated tenors.
However, the government is likely to reject expensive bids as it is currently 11.85% ahead of its prorated borrowing target having a net borrowing position of KSh 411.27Billion in the 2021/22 financial year.
Investors have been advised to bid within the range of 12.74% – 12.99% for the infrastructure bond.
NSE Weekly Activity, T-Bills Auction Subscriptions fell last week
Weekly Activity levels at the Nairobi Securities Exchange(NSE) declined 16.7% to a turnover of KSh 2.62Billion last week from the previous week’s KSh 3.15 Billion. Foreign investors sustained a bullish stance accumulating Safaricom, Equity Group and KCB Group while exiting EABL and BAT to print net inflows of KSh 289.31Million.
” We expect muted activity in the week as the market anticipates for the primary bond auction slated for Wednesday,” said Genghis Capital in its weekly note to investors.
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