Saturday, 20 April, 2024

Kenya Treasury Bonds

What are Kenya Treasury bonds?

Kenya Treasury Bonds are long-term debt securities issued by the Central Bank of Kenya on behalf of the Kenyan government. A bond functions like a loan agreement between you, the investor purchasing the bond and an issuer, the Central Bank of Kenya which is borrowing your money. In return, you will receive interest payments twice a year as well as the initial amount of money you invested when the bond matures.

What is a Depository Receipt?

A Depository Receipt gives an investor direct ownership of the underlying asset, usually a stock or a bond, along with some of its benefits.

It is a way for organisations to offer their securities to, and raise money from, investors outside of the country in which they are originally issued.

Why should I invest in the Kenya Treasury bonds with ALTX?

Risk Management
Diversifying geographically means you are covered if the economy in one country is affected by interest rate changes or other factors. Additionally, bonds are guaranteed by the Central Bank of Kenya which has a good track record of honoring its debts to bond investors.
‍‍Earning Power
Boost your sources of income with the interest payments you receive twice a year. Additionally, the Kenya shilling is one of the most stable currencies in East Africa. The returns from your bonds are less likely to fluctuate significantly.
Easy Access
Conveniently buy your bonds in Uganda shillings on one of our self-service platforms (Mobi or uTrade). Gives you access to Kenyan bonds at lower transaction costs compared to transferring funds to Kenya and making the same investment.

How do I make money from Kenya treasury bonds?

  1. Interest payments: Kenyan Treasury bonds pay interest twice a year at a fixed rate. You may reinvest the money into buying more bonds or request to be paid into your bank account.
  2. Selling: You may sell your bond at a time when its market price is higher than what you bought it for, earning you a profit in addition to the coupon payments you may have already received.
  3. Holding until maturity: You will receive the full sum of your original investment at face value, along with your final coupon payment.