Government targets Sh500m during third re-open of M-Akiba bond

The National Treasury (TNT), the Central Depository and Settlement Corporation (CDSC) and the Nairobi Securities Exchange (NSE), have jointly launched the re-open of the M-Akiba Retail Infrastructure Bond Issue MAB/2/2017/03.

The re-open will offer Kenyans another opportunity to invest in the Government Infrastructure Bond. This is the third re-open of the Bond since the first Issuance in 2017.

The Bond is runs from Monday, August 19, 2019, to Friday, midnight September 6, 2019 and seeks to raise Ksh500 million (five hundred million Kenyan shillings). This follows the successful uptake of the Bond in May 2019 which attracted 75 percent subscription rate, representing Ksh187 million against a target of Ksh250 million.

The value date shall be on Monday, September 9, 2019. The Bond will start trading at the NSE on Tuesday, September 10, 2019. The three-year Bond has one year of its tenure remaining, with a redemption date of September 7, 2020.

UPTAKE

“M-Akiba continues to offer the great convenience, simplicity and value to investors, with a 10 percent guaranteed return in interest income per year which is tax free," CDSC Chief Executive Rose Mambo noted.

“M-Akiba is a government product that seeks to enhance financial inclusion amongst Kenyan citizens and the proceeds shall be applied towards government men infrastructure projects.

“To date, the M-Akiba bond has raised a total of Ksh782 million. The structure of uptake for the Offers has been more or less the same with about 68 percent of Kenyans taking up bonds worth between Kshs3,000-20,000, while 24 percent of the investors bought bonds worth between Ksh20,001-100,000, and the remaining 8 percent invested above Ksh100,000.

“CDSC on behalf of the National Treasury has paid out a total of Ksh67 million to investors as interest income. CDSC hosts over 513,000 M-Akiba CDS accounts."

Ms Mambo affirmed: “CDSC will continue to safeguard investor information and ensure seamless settlement of transactions in the primary and secondary trading by continuously putting in place the latest advanced systems to ensure improved customer experience.”

TRADING

Reiterating her remarks, the NSE Chief Executive Geoffrey Odundo noted: “The Exchange is keen and committed to enhancing growth among local retail bond investors through M-Akiba. The NSE will continuously provide a world class trading facility to facilitate the listing and consequent trading of the bond. The growth in registration and subscription of the bond is a testament of its ability to enhance financial inclusion in line with the NSE strategic objective and the Capital Markets Master Plan 2014 – 2023”.

M-Akiba seeks to deepen and enhance financial inclusion through leveraging on increased mobile phone penetration to democratize access to formal financial systems for savings and investments. More Kenyans are now able to participate in Government bonds by investing a minimum Ksh3,000 which is considerably lower in comparison to the minimum Ksh50,000 required to invest in other Treasury bills and bonds.