Demand for Kenyan debt seen muted, Nigerian yields to dip

KENYA
   The Central Bank of Kenya will auction 91-day, 182-day and 364-day Treasury bills worth  9 billion shillings ($102 million).
   At this week's sale, the weighted average yield on the 91-day Treasury bill rose slightly to 8.885 percent from 8.845 percent last week. The yield on the 182-day paper was up at 9.927 percent from 9.851 percent, while 364-day bills yielded 10.079 percent from 10.071 percent.
   "We see (yields) nudging upwards, but they are moving up in  very small amounts, like four basis points, two basis points. I think that trend will continue," said Ignatius Chicha, head of trading at Citibank Kenya. "I still think they will still be under subscribed."
   Other traders expected more demand for shorter dated repurchase agreements, used by the central bank to mop up excess liquidity.
   "People prefer to hold cash in the near term, as opposed to investing it for longer than one week. So I expect the rates to maybe stagnate around  here," said Duncan Kinuthia, head of trading at Commercial Bank of Africa.
   
   NIGERIA
   Nigerian traders predicted yields would drop slightly next week in a market expected to be flooded with cash, fuelling demand for debt.
   Yields jumped this week after the central bank's monetary policy committee left the benchmark lending rate unchanged at 12 percent while some investors took profits.
   "We see yields falling marginally next week at the short-end of the tenure as demand for local debt will be driven by the high level of liquidity in the market," a dealer said.