In our Cytonn Report this week, we analyzed the performance of Kenya’s Equities, Fixed Income, and Real Estate markets for the ended week, with a special focus on review of Real Estate Investments Trusts (REITs) in Kenya. Below are the highlights.; a) Fixed Income: During the week, T-bills were oversubscribed, with the overall subscription rate coming in at 296.6%, a reversal from the subscription rate of 56.1% recorded the previous week. Investors’ preference for the shorter 91-day paper persisted, with the paper receiving bids worth Kshs 10.0 bn against the offered Kshs 4.0 bn, translating to an oversubscription rate of 250.0% significantly higher than the undersubscription rate of 61.6% recorded the previous week. The subscription rates for the 182-day and 364-day papers increased to 240.0% and 371.9% respectively, from the 28.6% and 81.3% recorded the previous week. The government accepted a total of Kshs 59.7bn worth of bids out of Kshs 71.2 bn bids received, translating to an acceptance rate of 83.9%.The yields on the government papers were on a downward trajectory with the yields on the 364-day paper decreasing the most by 55.5 bps to 10.8% from 11.3% recorded the previous week, while the yields on the 182-day and 91-day papers decreased by 50.9 bps and 40.6 bps respectively to 9.5% and 9.1% from 10.0% and 9.5% respectively recorded the previous week; During the week, the government announced its first-ever domestic treasury bond buyback aiming to buyback Kshs 50.0 bn of Kshs 185.1 bn for the FXD1/2020/005, FXD1/2022/003 and IFB1/2016/009 with tenors to maturity of 0.4 years, 0.3 years and 0.4 years respectively, and fixed coupon rates of 11.7%, 11.8% and 12.5% respectively. The total outstanding amounts for the FXD1/2020/005, FXD1/2022/003 and IFB1/2016/009 are Kshs 104.5 bn, Kshs 60.6 bn and Kshs 19.9 bn each respectively. The period of the buy-back opened on 7th February 2025 and will close on 17th February 2025 with a settlement date of 19th February 2025. Our expectation is that the bond buyback will be undersubscribed, given the remaining short-term tenors to maturity of the bonds, as most investors may prefer to wait till maturity rather than sell at a potential discount. Additionally, if the government’s buyback price is not attractive then investors may prefer not sell leading to an undersubscription; Click the link below to read the Cytonn Weekly report: https://cytonnreport.com/research/review-of-real Click the link below to subscribe to our Weekly Report: https://cytonnreport.com/subscribe