Kenya’s first of its kind mobile-only government bond raises $1.97 million in 14 days, narrowly missing its target

Kenya’s first of its kind mobile-only government bond raises $1.97 million in 14 days, narrowly missing its target
  • The tranche, which was on offer from February 25 to March 10 hit a subscription rate of 79 per cent, having attracted over 82,829 new registrations.
  • The million mobile traded M-Akiba however, narrowly missed its target of Sh250 million ($2.5 million) as investors remained leant on 364-day Treasury bill.
  • The bond, which was introduced in 2017, had been structured to attract small investors with investments of as little as Sh3,000 to help fund infrastructure as well as inculcate saving culture.

Kenya’s first of its kind mobile-only government bond, M-Akiba, managed to raise Sh197 million ($1.97 million) in its second reopening.

The tranche, which was on offer from February 25 to March 10 hit a subscription rate of 79 per cent, having attracted over 82,829 new registrations.

“The 79 per cent subscription rate is a clear indication of Kenyans investment appetite and an affirmation of the need for more innovative financial products in our market,” chief executive Geoffrey Odundo said on the outcome.

The million mobile traded M-Akiba however, narrowly missed its target of Sh250 million ($2.5 million) as investors remained leant on 364-day Treasury bill.

The Capital Markets Authority has approved the bond for secondary trading on the Nairobi Securities Exchange (NSE).

Central Depository and Settlement Corporation (CDSC) chief executive Rose Mambo said the agency now hosts 459,586 M-Akiba bond CDS accounts. This means that only a few people who opened the accounts went ahead to buy the bond.

The bond, which was introduced in 2017, had been structured to attract small investors with investments of as little as Sh3,000 to help fund infrastructure as well as inculcate saving culture.

The outcome defied Mr Odundo’s prediction who had last month tipped the bond will outmuscle 364-day Treasury bill and two-year bond. The 364-day paper received 266.21 per cent oversubscription despite offering interest of 9.43 per cent, which is below 10 per cent offered on M-Akiba.

Listing the bond on the NSE now brings to three the number of mobile traded bonds on the bourse. In 2017, the Treasury raised Sh247.75 million ($2.477 million) being 24.76 per cent subscription, out of Sh1 billion that was put on sale.

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