Eurobond data shows dim view of Kenya

By Constant Munda | Business Daily, Kenya October 3, 2017

The yield on Kenya’s 10-year Eurobond on the secondary market has gained steadily in the last five weeks, data by the Central Bank of Kenya (CBK) shows, an indication that global investors may be jittery about the country’s long-term economic prospects.

The yield on the $1.5 billion (Sh154.5 billion) bond rose by 0.154 percentage points last week to 6.54 per cent compared to a week earlier, data collated by the CBK showed.

That on the $500 million (Sh51.5billion) five-year facility, however, fell 0.17 percentage points to 4.28 per cent, signaling better short-term prospects by investors.

The secondary market yield on the 10-year sovereign debt facility has not recovered from a gaining streak which started building after a September 1 majority-ruling by the Supreme Court which nullified President Uhuru Kenyatta’ s re-election in August  8 polls.

Cytonn investments chief investment officer Elizabeth Nkunkuu said the gain was likely being driven by the country’s growing public debt to GDP ratio which stood at 51.5 per cent in June against the threshold of 50 per cent for emerging economies.

“For the 10-year to be going up, may be investors are not 100 per cent confident about the long-term prospects of the country…”

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