The National Treasury missed its target sale of the 10-year bond by Sh7.22 billion following the holidays.
Central Bank data shows the Treasury bond reopened on December 27 and received Sh6.62 billion
bids against the advertised Sh13.84 billion.
This forced the Treasury to accept the bids for the bond that was previously issued on December 13.
This also represented a 77.06 per cent and 74.68 per cent decline in bids received and accepted respectively compared to the previous offer.
“The auction was based on a uniform returns of 12.5 per cent determined in the December 13 Treasury bond auction, reflecting a slight decline from the previous 10-year bond issued in September at 12.67 per cent,” Central Bank’s weekly bulletin stated.
Similarly, secondary bond market activity reduced with the volume of bonds traded reducing by 26 per cent during the week ending December 27 compared to the week ending December 20.
However, returns on five-year, 10-year to mature in 2024 and 2028, and 30-year Eurobonds increased slightly in the week ending December 27 to indicate investors’ low-risk perception.
“Trading was thin because of the holidays. Against a backdrop of concerns over weaker global growth and US-China trade tensions, investors were unnerved by the US government partial shutdown and US administration’s hostile statements about the US Fed," the Central Bank said.
"Efforts by US Treasury Secretary to calm investors were inadequate."