The 91-day Treasury bill continued to stabilise this week with a marginal increase of 38 basis points to 10.775% from 10.737% the previous week. The effects of the fall in Treasury bill rates have started showing in the mortgage sector with mortgage finance companies lowering their rates. Companies that have lowered their rates include East African Building Society (EABS), Savings and Loan Company (a subsidiary of Kenya Commercial Bank) and Housing Finance Company Kenya (HFCK).

Horticulture earned Kenya a record Ksh 50 billion last year. The Minister for Agriculture, Mr Mudavadi said that Ksh 14 billion was earned from the export market while the remaining Ksh 36 billion was realised in the domestic market.

Kenyan tea prices improved at the weekly auction amid concerns that the current dry weather will see crop volumes falling. Kenya expects a bumper 1998 crop of approximately 290 million Kg. However, the 1999 crop may drop due to the failed short rains season.

Weekly trading at the Coffee Exchange resumed this week with strong prices. A 50kg bag of clean coffee fetched upto US$ 244, compared to US$ 215 recorded during the last auction in December.

The International Finance Corporation (IFC) has approved a loan of Ksh 1.8 billion to Kenya Commercial Bank to finance small and medium enterprises. The project includes on-lending to export orientated businesses, which will use money to rehabilitate, restructure and expand investments in agricultural, manufacturing and tourist sectors. This investment is also expected to improve the KCB’s management information systems, operating policies and procedures. IFC’s director for Africa division said the project would provide institutional support to KCB in its post privatisation phase.

The failure of the Government to set up an Anti- Corruption Authority has led to a delay of talks of a resumption International Monetary Fund lending to Kenya according to senior Treasury and IMF officials. Mr Osunsade the IMF’s resident representative said that the IMF wanted to see a good management mechanism for a new Anti-Corruption Authority put in place before resuming aid.

The 91-day Treasury bill Rate rose marginally by 38 basis points to stand at 10.775%. CBK accepted Ksh 9.0 billion. CBK had invited tenders for Ksh 9.00 billion and received tenders for Ksh 10.76 billion. The 182-day T-Bill Rate however came down to stand at 10.186%.

The One–Year and Two-year Floating Rate Bonds, FR1/1999/1 and FR1/99/2 opened for sale on Wednesday January 6^th, 1999 and close on January 20^th, 1999. The Bonds are sold in minimum lots of Ksh 50,000. Interest on the one-year bond will be paid quarterly at 0.25% premium above the 12 week moving average on the 91 day Treasury bill rate at the beginning of each interest period. Interest on the two-year bond will be paid semi-annually at 0.5% premium above the 12 week moving average on the 91 day Treasury bill rate at the beginning of each interest period. No fees or commissions are payable by purchasers on the primary issue.

The Bond Market dealt bonds worth Ksh 303.75 million during the week compared to Ksh 151.5 million in the previous week. Issue 2/98/1 dealt Ksh 0.8 million at 100.10% while Issue 3/98/1 dealt Ksh 1.05 million between 100.10% and 100.60%. The two-year Issue 1/98/2 dealt Ksh 160 million between 110.53% and 112.34% while Issue 5/98/2 dealt Ksh 141.9 million between 104.66% and 105.00%. EADB bond was quiet. The yields on these listed bonds are shown below: