12 September 2017

Kenya: Political Uncertainty Blamed for Poor M-Akiba Uptake

Nairobi — Political uncertainty in the country has been blamed for the failure of the M-Akiba interest bond that missed its target by 75 per cent.

The bond that closed on Monday netted a total of Sh247 million below the Sh1 billion target.

Genghis Capital Research Analyst Gerald Muriuki says the low uptake is also attributable to inadequate awareness among Kenyans on the offer.

"The timing was not very appropriate due to all the political heat that's going on in the country. During such situations of uncertainty, a lot of people tend to hold cash," Muriuki told Capital FM Business.

The Treasury extended the second phase of the M-Akiba bond sale to September 11 as the sale failed to take off.

The sale that had been closed on July 22 had only raised Sh140 million at the time against the Sh1 billion that was on offer.

The government had also left the door open to raising Sh3.5 billion should there have been demand.

"The extension to September was in anticipation that the elections will end on August 8. The presidential election being done a fresh on October 17, has negatively affected the uptake," he said.

The Treasury said the bond attracted a total of 303,534 investors in its main offer, out of which 5,988 bought the bond.

The three-year infrastructural development issue has a coupon rate of 10 per cent annually, paid bi-annually until the bond matures.

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