NairaQuest:


IAS39 deals mostly about fair value accounting and hedge accounting. Yes, it did not specifically talk about how banks should deal with TBills however, when you buy a TBill at a discount,the journal entry is usually a credit to cash for the purchase price and a debit to investment account. By virtue of the realization principle in accounting you have not earned the interest and therefore prudence principle of accounting will not allow you to credit interest revenue on purchase date, rather at maturity or on sales date if you sell it before maturity

For my own edification since I am not in Nigeria and may have lost touch with realities in Nigeria, could you let me know the direction of cash flow when aTBill is purchased

NairaQuest:


This is what I have been saying, they are not supposed to debit you with N100,000 rather with the purchase price so that at maturity you get credited with N100,000 and the difference becomes the interest but because Nigerian banks are getting it wrong, they debit you with the face value only to credit you back with the difference making it look like you got the interest upfront. This is a scam and I am amazed at how many people are being fooled with that misconception. Financial instruments and derivatives originated in the US and other more advanced economies, I never saw Wall Street come up with that falacious notion that TBills pay interest upfront

princeuk21:
maybe they used the money for fixed deposit but contact your branch manager.

NairaQuest:


IAS39 deals mostly about fair value accounting and hedge accounting. Yes, it did not specifically talk about how banks should deal with TBills however, when you buy a TBill at a discount,the journal entry is usually a credit to cash for the purchase price and a debit to investment account. By virtue of the realization principle in accounting you have not earned the interest and therefore prudence principle of accounting will not allow you to credit interest revenue on purchase date, rather at maturity or on sales date if you sell it before maturity

For my own edification since I am not in Nigeria and may have lost touch with realities in Nigeria, could you let me know the direction of cash flow when aTBill is purchased

silvoice:
all these people quoting accouting principle and you advising smbody to contact branch manager, is not a must that u advice on what u know a little or nothin about. I hav said it that d theory of intrest at maturity is not what is obtainable in 90% of these custudian financial institutions in Nig. selling Tbills. So if someone said a bank took entire face value of 100k in Nig. bank, It's normal. As they would credit d intrest shortly after the auction. Don't cause innocent investors much pain with theoretical advice that would make them look stupied when they go to the bank and begin to quote a/cting principle. Or are u not aware that most of this small amount investors will literarily beg this banks to sell tb to them to no avail they wil tell u that d don't do tbill with that amount.

unite4real:


I dont even know what you are talking about. I give you an instance, i have personally been investing in treasury bills for the past 5 years with 3 different banks. on each occassion and bank, they normally leave my discounted interest and the difference is debited. There had never been a time that all my principal was debited only to credit the interest later. that can only happen when you buy government Bond. So the advice that was given is not bad at all because if it happened to me, i will go straight to the bank and raise my voice small.

unite4real:


I dont even know what you are talking about. I give you an instance, i have personally been investing in treasury bills for the past 5 years with 3 different banks. on each occassion and bank, they normally leave my discounted interest and the difference is debited. There had never been a time that all my principal was debited only to credit the interest later. that can only happen when you buy government Bond. So the advice that was given is not bad at all because if it happened to me, i will go straight to the bank and raise my voice small.

unite4real:


I dont even know what you are talking about. I give you an instance, i have personally been investing in treasury bills for the past 5 years with 3 different banks. on each occassion and bank, they normally leave my discounted interest and the difference is debited. There had never been a time that all my principal was debited only to credit the interest later. that can only happen when you buy government Bond. So the advice that was given is not bad at all because if it happened to me, i will go straight to the bank and raise my voice small.

ukay2:



Please, I bought FGBond(feb2020) on August 12th, when will the coupon (interest) be paid(I.e start coming into my account)?
Thanks

feelamong:


coupons are paid semi annually...June and December..

so by december we suppose come do small party for ur side..

silvoice:
you are right in what you are saying but my point is that as far as Nig. Banks are concern, they either debit the face value and credit ur interest shortly after or leave ur interest while debiting. In either case we have no control of what they do. We can only complain and they will apologise only to repeat same another time. So it will be wrong to assume that something is wrong if the debit the entire face value.

ukay2:



Please, I bought FGBond(feb2020) on August 12th, when will the coupon (interest) be paid(I.e start coming into my account)?
Thanks

Mohr:
FGN Bond 2020 will be paid bi-annually, 13- Feb & 13- Aug.

debostar:
Please, does anybody know why FBNH is not showing on the Morgan trading platform. Its being difficult to trade FBNH since yesterday.Thanks.

ukay2:



Please, I bought FGBond(feb2020) on August 12th, when will the coupon (interest) be paid(I.e start coming into my account)?
Thanks

Yem0350:

Check the "premium' board

yomi007k:

Hello sir,
Pls I'd like 2 know why u chose bonds over T-bills. How much r dir interest rates? How often do u get paid ?
I'm also lookin 2 invest.
Thanks.

ukay2:
...


@August 2015;5 years FGBOND feb 2020 interest was 15.36%,higher than NTB....

Coupon (interest) is being paid twice in a year. .....6 monthly....I.e if the interest is 1 million naira in a year, you will be paid 500 thousand naira every 6 month for 5 years if you hold on for that 5 years. And your principal amount returned into your account at maturity.....


Hope other ogas in the house will explain more...

Am just learning this investment thing this year

yomi007k:

Hmm not bad
Tnx boss
Na to hustle hard n cut off unnessary expenses oo.
But does FGNbonds have demerits?
Wat happens if for example in 2018 if d FGBonds rate get to 20% will u still be paid ur 15% interest rate?

Naijainvestor:



This is what is called the interest rate risk in bond investing. If the rate goes that high, you will still be paid the 15% but you can decide to sell it and reinvest in the higher interest bond, the only problem is that when interest rates go up, bond prices go down, so you may not realize the purchase price if you sell then. That is why it is advisable to try to speculate on how interest rate will go before buying bonds. Having a mixture of medium term and long term bonds may help manage such risks

Naijainvestor:
When interest rates go up, say from 15% to 20%, no one wants to buy the bond with a 15% interest. The only way to motivate buys is to sell the 15% bond at a lower price to compensate for the rate difference

There is no single price for all the FGN Bonds, it depends on coupon, maturity etc, if you tell me which one you want, I will tell you the price.

There is a way to anticipate the direction of interest rate by observing and analyzing economic events. That is looking at the yield curve but I cannot do justice to that in a forum, it needs detailed explanation but as an example, the fact that oil prices are falling indicates that Nigeria will be at a tight Corner to meet its obligations, the implication of this is that rates will increase, if this anticipation is true, then it pays to go for shorter term instruments

ukay2:



Thanks my oga

For 15.54%Feb2020 FGNBond, what is the price?


What are the shorter term instruments one can invest?


Really I love investment..... Really, I don't know why people que in embassies for visa when there are so much Money to make in naija..

Once u have a job that you earn salary or business that gives you good income one has to be PATIENCE and build your financial world gradually..

I only go outside for vacations and come back naija for making money via NTB, FGNBOND, MUTUAL FUNDS, NSE, REAL ESTATE...

I think many people including some "bankers" do not know many of these investment opportunities...

yomi007k:

Ppl dat queue for visas don't have a salary to earn or a business that gives them income.
It is not their fault. Its better dey go out dn rot down here.
Naija is hard, only very few can drop millions for bonds n bills.
Shalom

ukay2:


I think the money/expenditures for visas be channelled into businesses and other investments here in naija.

Many people are still making it big time in naija..... Just patience and right information are essential..

Sometimes, after spending such money , some maybe repatriated into naija or they suddenly realise that it is not greener at the other side of life...