During the week, Treasury bills remained under-subscribed, with the overall subscription rate coming in at 65.7%, an increase from the 21.6% recorded the previous week.
This can be mainly attributed to the concurrent primary bond issue where the government issued a 2-year bond, FXD1/2021/002, which recorded a higher overall subscription rate of 244.6%, coupled with the continued tightening of liquidity in the money markets, evidenced by 0.2% points increase in the average interbank rate to 6.2% from 6.0%, recorded last week.
The Central Bank of Kenya had issued a 2-year bond, FXD1/2021/002, with a coupon of 9.5%. There was a slight improvement in the business conditions as the Stanbic’s Monthly Purchasing Managers’ Index (PMI) improved to 51.4 in December 2020, from the 51.3 recorded in November 2020;
During the week, the equities market was on an upward trajectory, with NASI, NSE 20 and NSE 25 gaining by 1.4%, 1.5% and 0.8% respectively, taking their YTD performance to gains of 1.4%, 1.3% and 1.0%, for NASI, NSE 20 and NSE 25, respectively. The equities market performance was driven by gains recorded by large-cap stocks such as BAT, Co-operative Bank, Bamburi and Diamond Trust Bank (DTB-K) of 8.4%, 4.0%, 3.6% and 3.3% respectively. The gains were however weighed down by losses recorded by other large-cap stocks such as NCBA Group, Standard Chartered Bank and ABSA Bank of 4.3%, 2.9% and 1.9%, respectively;
During the week, the National Treasury announced plans to draft a national property rating legislation to replace the outdated Valuation for Rating Act of 1956 and the Rating Act of 1963;
Focus of the Week
Business owners can fund their business through various means but they fall mainly into two main brackets i.e. equities or debt. There is occasional structuring that is done to get some in between the two forms of capital sources to enhance the attractiveness to potential investors. Globally, capital markets play a key role in ensuring that businesses get the requisite funding and that owners of Capital are well-protected and get the return that is required;
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