Results are out. Coupon of 11.492% which means a net of 9.7682%. Mali is great if they can pull it off with the flexibility and rates they promise.

Here is a soundbite for the day.

Western central banks are actively buying their own government sovereign bonds via a mechanism called Quantitative Easing (QE).QE bond buying schemes have been prevalent in US,Eurozone and Japan since the 2008 crisis where these major central banks have bought up over 20 trillion USD equivalent of their own government debt to suppress yields and interest rates and stimulate their economies with ultra low interest rates thus pull themselves out of the 2008 recession.So overwhelming has this bond buying scheme been in Europe and Japan that sovereign debt yields have turned negative (a whooping 17 trillion of global bonds ie 1/4 of the world's debt market has negative yields) thus if an investor in Europe and Japan buys these bonds and holds them to maturity they are destined to lose money and this abnormality has pushed Eurozone and Japanese investors to seek relatively higher yielding US treasuries that yield a paltry 1.7% for the 10 year note.

Strange world we live in where Western central banks create fiat from nothing and buy their own government debt which is akin to debt monetization.The Fed is currently involved in 60 billion USD/month in short term T-Bill purchases and whooping 300 billion/day in repurchase agreements purchases to stem a liquidity crunch in Western financial markets.

Maybe the Kenyan government should cook up an equal scheme ie issue bonds and have CBK buy a large chunk of them pushing yields ever lower and thus lowering loan borrowing costs.Its this scheme that allows Western loan rates e.g. mortgage rates to become a paltry 5% but for course such activities would lead to disaster long term.

Check out this Bloomberg article

https://www.bloomberg.co...s/negative-yield-bonds/


It gets worse.Swiss Central Bank creates francs and uses it to buy US stocks like Facebook and Apple.Japanese central bank creates yen and is the biggest bond and stock ETF holder in Japan.

https://www.holdingschan...onal-bank-top-holdings/

https://asia.nikkei.com/...r-as-liquidity-dries-up

Just imagine if CBK started creating new Kenya shillings and buying stocks of Safaricom,Equity Bank and so forth

Mali investment is capped at 70,000...this is definitely not for mbig mboys.

So, It is the 13th. today, and the January T-Bond as still not been advertised.
I hope it is a 2 year bond like the one in January last year.
That was very heavily over subscribed.
We have already had MANY long term bonds in 2019.

@maka,
I agree with you fully. The Government is "trying" to length its maturity profile.
However, is it succeeding?
I don't think so.
Look at some examples:

- The 2 year bond Fx1/2019/2 issued in January 2019, was hugely oversubscribed with almost 77 Billion in bids.
- The 5 year bond Fx3/2019/5 issued last month was also oversubscribed.
- Even the last 1 year T Bill, 2270/364 dated 13/01/2020 was HUGELY oversubscribed. With 10 Billion on offer, bids were 39.77 Billion. The Government took 36.83 Billion !!!!

All other longer term bonds, issued last year, did not do too well in terms of subscription.

Therefore, I don't believe that investors are too keen on longer term bonds.

Maybe we wait for that 150Bn roads bond they want to issue

Don't imagine

The Kenya Roads Board (KRB) has received bids from a consortium of Citi bank, Absa, Renaissance Capital, Equity Group holdings and Rand Merchant Bank seeking to arrange a Ksh 150 Billion financing plan to fund roads development, maintenance, and rehabilitation. Further, Dyer and Blair and Africa Finance Corporation submitted a joint bid.

According to Bloomberg, another group led by NCBA group, Standard Chartered, Co-operative bank, and KCB Group also submitted their bids. Standard Group’s Kenyan Unit and Lion’s head also belong to this last group.

Local market cannot swallow the 150B at ago with a longer tenure the way it is likely to be designed. Of course the 'arrangers' are also vultures in the making and plus back office deals.

My understanding of this is that the banks will act as transaction advisors. What will be the role of CBK in this because KRB has been given the mandate to borrow funds for infrastructure development?