I also feel that this M-Akiba would be more suited to treasury bills more that long term bonds

Was just about to ask the same thing.

We know you can buy by dialing *8-whatever_#, but how will you dispose of it? Is it liquidly tradable?
How will Wanjiku determine if she's getting a fair deal upon selling?

But I think the NSE will have provisions for these questions. Something like a leader board showing bids and asks. In that case let 'er rip.

6 months ain't too long wanjiku to wait for an interest payout. Its good.

Might even pop this property froth in the long term by giving peeps an alternative investment channel.



Equities will take a hit though, as wanjiku exits her positions.

You are missing the point guys. Bonds are high value investments. Traditionally invested in massively by HNI who have at most an objective to grow their monies just above inflation, here we talking of fund managers, investment bankers with lots of liquidity and highly liquid corporates etc. Bonds and Bills are designed for them...But to now bring in Wanjiku with her 3K...is a statement that GOK is too broke it needs any extra coin it can get.

Seems pretty straightforward to me https://www.facebook.com/Safaric...0156124926960084/?type=3; a lot to become clearer closer to the time, but it all starts with dialing those digits.


Picked on a conversation that shows Ethiopia were the first to do this 'Wanjiku' tbill raising KShs 36.5bn from 129 bob subscriptions! (not via mobile though).

This seems like a good initiative to build savings and it'll likely do very well initially. I think the way Kenyans invest this days however is more opportunistic (than long term) because they always need an exit and tend to relate to property (physical assets) better. But this will likely work because people like investing in new things.

It might have been more prudent to test the market with sh500 mio instead of Sh5bio given the anticipated admin work required to manage a Sh3,000 investor for example. If the bond is a successful then it can be tapped indefinitely until Treasury are satisfied with the proceeds. But then bond can't be liquid because the yield rate determined by Treasury (i.e., lack of an public auction kills pricing power) and ordinary stockbrokers seem clueless as to their role in this (if any).

Right now it seems Safcom and CDSC will be solely responsible for implementing the usual KYC process and anti-money laundering initiatives started by CBK. It's unclear what value CDSC adds as this project should have remained with CBK to harmonize the bond registry for coupon payments. In this case both CDSC and CBK will have to keep accurate records for the thousands of investors, which begs the question of whether CBK can now outsource it's custodian function (for all government securities) to a private sector entity.

The only way to liquidate this bond will be through rediscounting, which is done at 3% above market yields currently (wanjiku will be shocked by this initially). Rediscounting means that CBK and CDSC will have to coordinate perfectly with record sharing, which is very inefficient.

Perhaps more immediate reforms Treasury can institute is remove withholding tax for foreign investors on Treasury bills (to attract USD to Kenya), rework the repo market mechanisms for institutional banks (to provide money market liquidity) and revert to mobile phones completely for all government securities below Sh100,000 (to make them more accessible to wananchi).