Kenya Fixed Income Market Weekly Performance Update (January 24, 2025)

The Kenyan fixed income market saw increased investor activity this week, with Treasury bills experiencing strong demand and Moody’s upgrading Kenya’s credit outlook to positive.

T-Bill Performance Overview

T-bills recorded an oversubscription rate of 136.7%, a significant jump from the 78.6% recorded last week, reflecting heightened investor demand.

✅ 91-day T-bill: 419.8% oversubscribed, compared to last week’s 84.6% undersubscription.
✅ 182-day T-bill: 38.2% subscription rate, lower than 54.5% last week.
✅ 364-day T-bill: 122.0% subscription rate, up from 100.3%.
✅ Total bids accepted: Kshs 32.8 billion out of Kshs 32.8 billion received (100% acceptance rate).

T-Bill Yield Movements

📉 Yields declined slightly, reflecting easing interest rates:

▪️ 91-day T-bill: 9.53% (-4.0 bps)
▪️ 182-day T-bill: 10.03% (unchanged)
▪️ 364-day T-bill: 11.29% (-1.0 bps)

Government Bond Issuance Update

The government seeks to raise Kshs 70.0 billion through the reopening of two infrastructure bonds:

🔹 IFB1/2022/14 – 11.8 years maturity, 13.9% fixed coupon
🔹 IFB1/2023/17 – 15.1 years maturity, 14.4% fixed coupon

📅 Sale period: Opened on January 23, 2025, closing on February 12, 2025.

These bonds present attractive long-term investment opportunities, offering stable returns with tax advantages.

Moody’s Revises Kenya’s Credit Outlook to Positive

Moody’s Investors Service upgraded Kenya’s credit outlook from negative to positive, maintaining the country’s Caa1 rating.

🔹 Key factors behind the revision:
✔️ Improved liquidity conditions
✔️ Better debt affordability due to fiscal reforms

This upgrade signals growing confidence in Kenya’s economic outlook, which could encourage more foreign investment.

Investment Insights & Takeaways

📌 T-bills remain a popular short-term investment, with the 91-day paper leading demand.
📌 Infrastructure bonds offer long-term fixed returns with tax benefits.
📌 Moody’s positive outlook suggests improving economic stability.

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