Treasury: Government floats Sh500m M-Akiba bond

Tuesday, August 20th, 2019 00:00 |
Cash. Photo/Courtesy

Treasury has reopened a three-week M-Akiba retail infrastructure bond for the third time within a year to raise Sh500 million.

The bond was issued in conjuction with the Central Depository and Settlement Corporation (CDSC) and the Nairobi Securities Exchange (NSE).

Since the launch of mobile bonds in 2017, the M-Akiba sale has reopened severally every year with a subsequent sale that targets up to Sh4.85 billion — comprising Sh1 billion offering with a green shoe option of up to Sh3.85 billion — underperformed, raising Sh247.47 million.

Other issuances

The move follows the two other successful uptakes of M-Akiba retail infrastructure bonds issued in February and May this year in which the government was seeking to raise Sh1 billion and Sh250 million respectively to finance infrastructure projects.

The new issuance, which seeks to raise Sh500 million and is scheduled to run from August 19 to September 6, will start trading at the NSE on September 10. The second mobile-based infrastructure bond, which closed in May 2019, recorded a 79 per cent subscription rate having raised Sh197 million against a target of Sh250 million.

The reopening of the three-year M-Akiba bond provides Kenyans with a high return of 10 per cent interest within the duration of six months, tax-exempt, proving to be very competitive against other investment instruments.

M-Akiba bond was launched in Kenya on March 23, 2017, with a target of Sh150 million. The debut mobile traded bond saw Kenya become the first country in the world to offer a government bond traded exclusively through a mobile handset.

The bond seeks to deepen and enhance financial inclusion through leveraging on increased mobile phone penetration to democratise access to formal financial systems for savings and investments.

Since its inception in 2017, Kenyans are now able to participate in government bonds by investing a minimum Sh3,000 which is considerably lower compared to the minimum Sh50,000 required to invest in Treasury Bills and Bonds.

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