Central Bank of Kenya issues a 5-year Ksh50bn bond for budgetary support

In Kenya, the banking sector remains a dominant force on the Nairobi Securities Exchange, with shares worth $775 million transacted in the week ending on April 30th, accounting for 48.27% of the total traded value. The Central Bank of Kenya recently announced the issuance of a 5-year Ksh50 billion bond for budgetary support in May, with an auction date set for May 6th. The market-determined bond is set to mature in 2025, with the CBK encouraging investors to purchase the bond using Treasury Mobile Direct or Internet Banking. Rodney Omukhulu, Assistant Investments Analyst at Cytonn, joined CNBC Africa to discuss the recent market trends and developments. The interview highlighted the impact of the coronavirus pandemic on the market, as well as the performance of key sectors such as banking and telecommunications. Omukhulu shared insights on the trading activity of blue-chip companies, particularly in the banking sector, noting that foreign players were anticipating a possible upward movement in the market. He identified large banks like KCB, Equity, and Safaricom as key players driving market momentum. Omukhulu also discussed Safaricom's strong financial performance, attributing it to innovative products like the M-PESA initiative and the company's expansion into fixed internet services. He expressed optimism about Safaricom's growth prospects, emphasizing the company's confidence in pursuing an Ethiopia telco license. The discussion also touched on the Central Bank of Kenya's monetary policy changes, including a reduction in the repo rate to 7%, aimed at increasing cash flow in the market and making credit more accessible to businesses. Despite concerns about the effectiveness of these measures in mitigating the economic impact of the pandemic, Omukhulu viewed the move positively as a step towards supporting businesses in the market. As Kenya navigates through the challenges posed by the global health crisis, the resilience and adaptability of key sectors like banking and telecommunications are crucial in driving economic recovery and growth.