Interesting bt like someone said earlier we do not have a stable government no continuity ,money fit go lost

blank:

A country cannot default in paying bonds. It is impossible. They will rather issue new bonds at a higher interest rate to pay back. It is a very big deal to default. That is why they are called risk free bonds cos there is no issue of them defaulting.

My friend can you buy bond issued by Somalia or Mali, "once bitten twice shy" I will never invest in anything invincible

Why invest in Nigerian bonds when the country will split in 2015.
Caveat Emptor.

HAH: I will never invest in anything government due to the following reasons

1, Another government can come in and refuse redeeming it.

2, Nigeria is an oil dependent country with the possibility of US starting to explore it oil reserves in 2017 and many other coutries discovering oil there is very possibility of oil going for less than 20 dollar per barrel which means less money to states how can they redeem it.

3, The possiblity of war or riots everywhere due to the present realities in Nigeria

nagative thinker. When are you going to think positively?

HAH: I will never invest in anything government due to the following reasons

1, Another government can come in and refuse redeeming it.

2, Nigeria is an oil dependent country with the possibility of US starting to explore it oil reserves in 2017 and many other coutries discovering oil there is very possibility of oil going for less than 20 dollar per barrel which means less money to states how can they redeem it.

3, The possiblity of war or riots everywhere due to the present realities in Nigeria

Buying govt bonds is like gambling on its sovereignty. The returns is high and very close to being risk free. Like its said, no risk no reward

Toyrem: nagative thinker. When are you going to think positively?

Am just being a realist

chachal:

Buying govt bonds is like gambling on its sovereignty. The returns is high and very close to being risk free. Like its said, no risk no reward

I would rather take risk in other visible investment like real estate, Gold and commodity trading, I have no trust in anything government

OK BUSINESS IDEA

is any1 aware of any bond currently available?

They say, its not advisable to invest in bond now due to the changing over from one govt to another..what's your in take on that..can the next govt over rule the previous bond?

FGN BOND is the thing now. i hope u all are aware. Please try make illustration for us of like buying FGN bond with 100k @ 15.0% interest. please the interest on Bond is it acrrueable every year or how

dbestuncle:
FGN BOND is the thing now. i hope u all are aware. Please try make illustration for us of like buying FGN bond with 100k @ 15.0% interest. please the interest on Bond is it acrrueable every year or how

QFAC Bond summary report has all that. Request a copy at info@.com

blank:


A country cannot default in paying bonds. It is impossible. They will rather issue new bonds at a higher interest rate to pay back. It is a very big deal to default. That is why they are called risk free bonds cos there is no issue of them defaulting.

It is not impossible for a country to default but it is only remotely possible. That is the issue going on in Greece today. It happened in Russia in 1978 which led to the demise of the best staffed hedge fund in America, the Long Term Capital Management

NairaQuest:


It is not impossible for a country to default but it is only remotely possible. That is the issue going on in Greece today. It happened in Russia in 1978 which led to the demise of the best staffed hedge fund in America, the Long Term Capital Management

You're right. I did some research after that statement and came to your conclusion.

blank:


You're right. I did some research after that statement and came to your conclusion.

Thank you. That is y we are here to exchange ideas

Please clarify me on some things, like as am a student now and put down something like 200k how much return will one be looking forward to. Thanks

ozome15:
Please clarify me on some things, like as am a student now and put down something like 200k how much return will one be looking forward to. Thanks

It depends on the coupon rate on the bond, the highest coupon is about 15% so you will make about 30000 yearly. But as s student. If you will not need the money until you graduate that will be a good investment

@ NairavQuest.

Please I applied for 15 July 2015 FGN bond primary market auction of 500k via my bank Stanbic..... I was surprise the bank did not bid for me despite bidding successfully @ 14.2% for 5 years.

The bank said I should buy the FG bond in the secondary market which iI don't want...

Please can I still buy primary bond via my stock broker next month (August)?

ukay2:
@ NairavQuest.

Please I applied for 15 July 2015 FGN bond primary market auction of 500k via my bank Stanbic..... I was surprise the bank did not bid for me despite bidding successfully @ 14.2% for 5 years.

The bank said I should buy the FG bond in the secondary market which iI don't want...

Please can I still buy primary bond via my stock broker next month (August)?

Why do you not want to buy from the secondary market, with yield widening you will get it at a cheaper price

NairaQuest:


Why do you not want to buy from the secondary market, with yield widening you will get it at a cheaper price

Please could you explain in details how it will be better to get from secondary market after missing the primary market?
Thanks

ukay2:




Please could you explain in details how it will be better to get from secondary market after missing the primary market?
Thanks

There are either of two ways to buy a bond. Either directly during the auction process or through the market which is OTC in Nigeria for now.
The price of a Bond is determined largely by movement in interest rate such that if market interest rate goes up, the price of the bond goes down. Given that market interest rate in Nigeria is going up or will go on as a result of the volatility in the exchange rate and the slowness of the current government, it stands to reason that the prices of bonds will go down so you can get it cheaper then. Let me know if you need further explanation

NairaQuest:


There are either of two ways to buy a bond. Either directly during the auction process or through the market which is OTC in Nigeria for now.
The price of a Bond is determined largely by movement in interest rate such that if market interest rate goes up, the price of the bond goes down. Given that market interest rate in Nigeria is going up or will go on as a result of the volatility in the exchange rate and the slowness of the current government, it stands to reason that the prices of bonds will go down so you can get it cheaper then. Let me know if you need further explanation

Still didn't get you please.

I want to buy 500k FG bond for 5 years at 15% (interest) bidding... How can I get it lower in the secondary market? Can the interest be higher or lower in secondary market?

A five year bond with a coupon of 14.2% and a required yield of 15% (TYM) will be valued at N972.54 with face value of N1000. I do not have the term sheet of the bond, so I do not know if they are being allocated at par or discount but by my valuation they should be allocated at discount. If that is true, you will need to pay N 486,271.84 plus any broker charges for a bond face valued at N500,000. That is at the primary market, you decided what yield you want, in this case 15% but in the secondary market, you no longer decide the yield but the market does after factoring in other things like the credit quality of the issuer, forces of demand and supply, and other fundamentals of the economy like the price of crude, inflation, exchange rate etc. If the market interest rate increases, and they are bound to given the economic situation in Nigeria, the price of the bond will decrease. Let us assume that over the next week market interest rate increases to 15.5, then the price of this bond will become N 955.89 meaning that if you buy it then you will only need N 477,944.17 instead of N 486,271.84, a decrease of N8,327.67.
Note however that if market rate had gone down to 14.5% you would buy it at N 494,792.65, an increase of N8,520.81
So sometimes, if you are able to gauge the direction of market interest rate correctly and depending on the availability of the bond in the secondary market, it may be better to buy it at the secondary market especially if you intend to hold the bond to maturity.

Let me know if you need more

www..com

NairaQuest:
A five year bond with a coupon of 14.2% and a required yield of 15% (TYM) will be valued at N972.54 with face value of N1000. I do not have the term sheet of the bond, so I do not know if they are being allocated at par or discount but by my valuation they should be allocated at discount. If that is true, you will need to pay N 486,271.84 plus any broker charges for a bond face valued at N500,000. That is at the primary market, you decided what yield you want, in this case 15% but in the secondary market, you no longer decide the yield but the market does after factoring in other things like the credit quality of the issuer, forces of demand and supply, and other fundamentals of the economy like the price of crude, inflation, exchange rate etc. If the market interest rate increases, and they are bound to given the economic situation in Nigeria, the price of the bond will decrease. Let us assume that over the next week market interest rate increases to 15.5, then the price of this bond will become N 955.89 meaning that if you buy it then you will only need N 477,944.17 instead of N 486,271.84, a decrease of N8,327.67.
Note however that if market rate had gone down to 14.5% you would buy it at N 494,792.65, an increase of N8,520.81
So sometimes, if you are able to gauge the direction of market interest rate correctly and depending on the availability of the bond in the secondary market, it may be better to buy it at the secondary market especially if you intend to hold the bond to maturity.

Let me know if you need more

www..com

Thanks.....
Now the interest (coupon) is low in secondary martket, it should be better to still wait for the primary market in AUGUST.

how much am I likely going to make in two years for a 10k bond/?

Raylight2:
how much am I likely going to make in two years for a 10k bond/?

About 2,800 naira @14% rate

If my investment stratergy is to invest in fgn bond with coupon of 15%. Let say i invested 200000 and i buy additional 10000 for 5yrs. How much would be my total profit? I calc 15% for 5yrs yield to 100% return on investment without additional monthly capital

Can Somebody help me calculate roi in this scenerio! If my investment stratergy is to invest in fgn bond with coupon of 15%. Let say i invested 200000 and i buy additional 10000 for 5yrs. How much would be my total profit? I calc 15% for 5yrs yield to 100% return on investment without additional monthly capital

lifeskilz129:
Can Somebody help me calculate roi in this scenerio! If my investment stratergy is to invest in fgn bond with coupon of 15%. Let say i invested 200000 and i buy additional 10000 for 5yrs. How much would be my total profit? I calc 15% for 5yrs yield to 100% return on investment without additional monthly capital

15/100x200000=30,000 per annum...you will get 15,000 every 6 months for 5years

ukay2:



15/100x200000=30,000 per annum...you will get 15,000 every 6 months for 5years

Thank you. But you have not included the return on 10000 monthly addition to the investment let also assume 15000 is reinvested. What will be the total money earned in 5yrs