M-Akiba (world first mobile based goverment bond) off to flying start

[RV Pundit]

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http://www.businessdailyafrica.com/markets/Over-17-000-Kenyans-take-up-M-Akiba-bond-on-first-day/539552-3863406-v409bp/index.html

[RV Pundit]

t least 17,000 Kenyans subscribed for the bond on the first day, raising more than Sh16 million.
The uptake was so rapid at some point that the mobile network systems were overwhelmed.
By close of the second day, uptake was headed towards 15 per cent subscription .
The initial offer of Sh150 million will close on April 10 while bigger launch of a Sh4.85 billion bond is planned for June.
Mobile users are allowed to purchase as low as Sh3,000 of the government security.

[hk]

t least 17,000 Kenyans subscribed for the bond on the first day, raising more than Sh16 million.
The uptake was so rapid at some point that the mobile network systems were overwhelmed.
By close of the second day, uptake was headed towards 15 per cent subscription .
The initial offer of Sh150 million will close on April 10 while bigger launch of a Sh4.85 billion bond is planned for June.
Mobile users are allowed to purchase as low as Sh3,000 of the government security.

This will be big and the impact of it will forever change the debt market. What impressed me most its the secondary market feature.

[Georgesoros]

these are long or short term bonds?

[hk]

kenyans have scooped up the initial 150m M-akiba bond ahead of 13 days https://www.standardmedia.co.ke/business/article/2001235220/kenyans-lend-government-sh150million-in-a-record-13-days

[RV Pundit]

Wonderful. Now let hope they can innovate more. M-pesa daily limit of 140k need to be increased to 1m.

[Empedocles]

Of 102,632 people registered on M-Akiba, only 5.5 per cent of them actually invested in the bond https://t.co/dNdvfmcYJE pic.twitter.com/f2o5q1HJId

— BusinessDaily (@BD_Africa) April 6, 2017

[gout]

There is need for ring fencing these funds to certain projects to build public confidence/perception in the long run. While returns on government bills is guaranteed there is need to put the funds into tangible good use so that we do not end up with the Eurobond style publicity.

[Kichwa]

More opportunities for washing stolen cash clean.

[Georgesoros]

When you buy into these bonds, are they short or long term bonds? What are the maturity rates?
Is this a well thought out thing or a govt borrowing too much and end up like Greece, where bond holders got nothing?

[MOON Ki]

Fast-forward to now:

The seemingly lucrative M-Akiba bond fell short by 86 per cent at the Nairobi Securities Exchange three weeks after its debut launch on June 30.

The retail government bond which sought to raise Sh1 billion only raised Sh140 million bought by about 235,672 investors.

http://www.the-star.co.ke/news/2017/07/24/m-akiba-bond-down-86-per-cent-at-nse_c1602474

What happened?    The thing actually looks good for savings, and I'm surprised that many more have not taken it up.   The high-flown rhetoric of how the government would now have access to cheaper money for infrastructure etc. also seems to have taken a beating ... at least for now.

[Omollo]

It is actively competing with Big Gambling. The gamblers promise faster returns and have vacuum cleaned the poor of any extra cash.

[hk]

Fast-forward to now:

The seemingly lucrative M-Akiba bond fell short by 86 per cent at the Nairobi Securities Exchange three weeks after its debut launch on June 30.

The retail government bond which sought to raise Sh1 billion only raised Sh140 million bought by about 235,672 investors.

http://www.the-star.co.ke/news/2017/07/24/m-akiba-bond-down-86-per-cent-at-nse_c1602474

What happened?    The thing actually looks good for savings, and I'm surprised that many more have not taken it up.   The high-flown rhetoric of how the government would now have access to cheaper money for infrastructure etc. also seems to have taken a beating ... at least for now.

Also T-bills uptake has plunged for now don't know whether its because of elections or lack of liquidity http://www.businessdailyafrica.com/markets/T-bill-uptake-plunges-as-subscribers-go-for-bonds/539552-4028760-112v7jiz/index.html

[MOON Ki]

Also T-bills uptake has plunged for now don't know whether its because of elections or lack of liquidity http://www.businessdailyafrica.com/markets/T-bill-uptake-plunges-as-subscribers-go-for-bonds/539552-4028760-112v7jiz/index.html

But note that according to the article "Market analysts said this was triggered by investors shifting focus to the Sh30 billion 10-year bond currently on offer".  Obviously at that level, it appears to not be a liquidity issue.  Nor, I imagine, is it likely to be about elections if they are just shifting from one government product to another.

Anyways ... what I am really curious about is the "small person" who was supposed to jump at this, and, by logic, really ought to.   Perhaps elections and liquidity might be major issues there?

[hk]

Also T-bills uptake has plunged for now don't know whether its because of elections or lack of liquidity http://www.businessdailyafrica.com/markets/T-bill-uptake-plunges-as-subscribers-go-for-bonds/539552-4028760-112v7jiz/index.html

But note that according to the article "Market analysts said this was triggered by investors shifting focus to the Sh30 billion 10-year bond currently on offer".  Obviously at that level, it appears to not be a liquidity issue.  Nor, I imagine, is it likely to be about elections if they are just shifting from one government product to another.

Anyway ... what I am really curious about is the "small person" who was supposed to jump at this, and, by logic, really ought to.   Perhaps elections and liquidity might be major issues there?

Before investors would easily buy both longterm high yield and T-bills. The small investors maybe don't have cash or going to election uncertainty want to keep cash or regular deposits, we need more data to know exactly the reason. 

[Omollo]

t least 17,000 Kenyans subscribed for the bond on the first day, raising more than Sh16 million.
The uptake was so rapid at some point that the mobile network systems were overwhelmed.
By close of the second day, uptake was headed towards 15 per cent subscription .
The initial offer of Sh150 million will close on April 10 while bigger launch of a Sh4.85 billion bond is planned for June.
Mobile users are allowed to purchase as low as Sh3,000 of the government security.

Not much said about this Economic MOAS

[RV Pundit]

I don't see that as bad news - I see it as opportunity for CBK to innovative and find our what products to push through M-Akiba. Products geared towards the bottom pyramid. Short term fast maturity loans.

Not much said about this Economic MOAS

[hk]

I don't see that as bad news - I see it as opportunity for CBK to innovative and find our what products to push through M-Akiba. Products geared towards the bottom pyramid. Short term fast maturity loans.

Not much said about this Economic MOAS

This shows that the regular mwananchi doesn't have cash to save. It would be interesting to see how mshwari savings is doing. Also a lot need to be done to educate people on the M-Akiba liquidity .

[Omollo]

Do you have any firm stand on ANYTHING?

This shows that the regular mwananchi doesn't have cash to save. It would be interesting to see how mshwari savings is doing. Also a lot need to be done to educate people on the M-Akiba liquidity .

[hk]

Do you have any firm stand on ANYTHING?

This shows that the regular mwananchi doesn't have cash to save. It would be interesting to see how mshwari savings is doing. Also a lot need to be done to educate people on the M-Akiba liquidity .

I think M-Akiba is great it'll eventually help in diversifying the bond market. Slow uptake this time around shows Kenyans either don't have money or are hesitant to invest. Its not a reflection on the product M-Akiba.