Kenyan T-bill yields rise on election worries

NAIROBI (Reuters) - Kenya's short-term borrowing costs jumped at an auction on Wednesday and were seen climbing further as the uncertain outcome of this week's presidential vote prompted investors to price in more risk.

The slow pace at which votes cast by Kenyans on Monday are being counted has exacerbated tensions in east Africa's biggest economy and led to political parties complaining about flaws in the process, raising fears of unrest.

Wednesday's auction was oversubscribed but the yield on Kenya's 364-day Treasury bill rose to 12.542 percent from 12.362 percent at the last sale a week ago. The yield on the 182-day Treasury bill rose to 9.697 percent from 9.084 percent last week.

"Due to the uncertainty on the release of the elections results, investors will demand high interest rates to compensate the risk," Alex Muiruri, a trader at African Alliance said.

Yields on government securities would continue edging higher next week, said Muiruri, although he forecast demand would remain strong.

Bids worth 10.9 billion shillings were received for the 6 billion shillings worth of one-year debt offered on Wednesday, of which the central bank accepted 6.88 billion shillings.

The bank received bids totalling 4.6 billion shillings for 4 billion shillings of six-month bills, accepting 3.99 million shillings.

Next week, the central bank will offer 91-, 182- and 364-day Treasury bills worth a total of 10 billion shillings, it said.

Source: http://news.yahoo.com/kenyan-t-bill-yields-rise-election-worries-154351559--business.html

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