By Nicholas Nduati
Kenyans seem to be shifting from investing in the more secure government papers to other options if the latest low subscription of treasury bills is anything to go by.
This week the Government sought to raise 12 billion shillings through the 182 and 364 day treasury bills but received bids worth 6.2 billion shillings unlike in the past when such bids used to be oversubscribed.
Starlings Muchiri who is a partner at East African Tax Consulting notes that this could be due to low returns offered on treasury bills with investors now preferring the stock market.
Muchiri, via telephone tells us that the interest rate on government papers is nowadays low compared to what investors expect with many people now considering the stock market as more lucrative.
According to Muchiri, investor confidence could be low, this being an electioneering year. On the other hand Cyton Investments Manager Maurice Oduor notes that its nothing fundamental and that it’s just the sluggish start of the year.
Even with the low bidding, the government accepted bids worth 5.29 billion shillings, a situation Muchiri attributes to higher bidding of more than 10 percent interest rate leading to the bids rejection.
The government offered 10.46 percent interest for 182 day T Bill and 11.01 percent for the 364-day T Bill.