ntyce:




Go back to economics 101 to understand why Tbills should pay the lowest in investments

I did not take economics 101. Can you kindly in a very shot sentence tell me.why Tbill should pay lowest interest and why this a good news

Hmmm

Awoo88:

I did not take economics 101. Can you kindly in a very shot sentence tell me.why Tbill should pay lowest interest and why this a good news

Logic says the right the interest, the higher the risk involved.
Tbills is the safest form of investment, hence it's rate should be lower....
The lower rate will also encourage investment in the real sector (agric and manufacturing).
I know of individuals who shut down his business, invested his funds in Tbills, was earning 800k every quarter.
If the trend continues, most people will close shop, sit at home to earn interests leading to more job loses.
Also, some commercial banks were diverting their funds to OMO and Tbills, collecting interest and declaring profit thus neglecting lending to businesses.
Few months back, CBN tasked banks to give out 65% of their total deposit as loans, failure to do so will be met with sanction.
Banks are now being forced to give out loans.
I'm sure th CBN will reduce the MPR benchmark in the next few weeks since the cost of funds will also drop

DenreleDave:


.. Pls i am a banking and finance student, can someone explain more about this to me?

I bliv learning is unending

Hahaha. I found your comment funny and sincere.

I believe you have gotten the answers you seek. I also believe you know Tbills are government bonds and safest investment. Has a tenor of 91,182 and 364days.

Now they have crashed the rates, it is good news for government. They can source funds from US at a cheaper rate. Bad news for masses. It would put it almost at par with fixed deposit rates of some commercial banks. Which goes against the reason everyone jumped on it.

Anyway, it isn't so bad as people won't see much need for keeping funds idle. They might seek to invest in other sectors and businesses.

Flexherbal:
Everything in Nigeria is crashing, only taxes and bills are rising...

Let me concentrate on my herbs preparations.
Uncle Tony must not be a two minutes man, as his honeymoon starts this weekend. Anty Tacha must be satisfied.

If not that the business terrain in Nigeria is too rugged, who would have been investing in treasury bills!

Flexherb i need ur herb.my bedmoon will start this weekend wit lamborghini help me out to satisfy her.SOS frm a broda!

alizma:
Good news. High interest rate on treasury bills discourages deposit with commercial banks thereby reduce the amount available to lend to active and potential entrepreneurs who needs money for their business. For government to reduce the rate in its treasury bill, it also shows that government internally generated revenue has increase or the collecting agents do no longer hold money for too long( benefit of Treasury Single Account) therefore government is now able to meet up its short term needed funds and no longer rely heavily on treasury bills to fund its short term expenses.

Thanks

studentofTruth:


Yes, I'm blind. Please, give me examples of good businesses with guaranteed returns, which one can do with N1m.

I'm waiting for your response. Thank you.

Let me assist.

Below is a list of businesses that require low starting capital and can give returns well over 100% per year.

Negative thinking has blinded many Nigerians to opportunities staring us in the face. My word of advice is to think positively and always look for a remedy rather than complain. God bless you!

1. Quail Bird Farming
2. Catering Services (Indoor and Outdoor)
3. Mobile food Vending
4. Computer Training Centre
5. Computer Repair and Accessories Sales.
6. Mobile Phone Sales and Repairs
7. Rental Services
8. Food Processing
9. Cement Sales and Distribution
10. Frozen food Sales
11. Pure and Bottled Water Production
12. Livestock Farming
13. Poultry Farming
14. Used Car Sales
15. Social Media Marketing
16. Blogging
17. Freelance Writing
18. Mini-Importation
19. Exportation
20. Cooking Gas Sales
21. Recruitment Agency
22. Uniform Making factory
23. Ready-to-wear clothes making
24. Haulage and Logistics
25. Transportation
26. Online Marketing
27. Bulk SMS Services
28. Daycare Centre/Crèche
29. Small Scale Manufacturing
30. Scrap metal sales
31. Waste Management Services
32. Pet Breeding
33. Animal feed production
34. Ethanol Production
35. Software and games development
36. Security gadget sales
37. Home/Office Cleaning Services
38. Recharge Card Printing and Sales
39. Sports Viewing Centers
40. Massage Parlour
41. Building Blocks Production.
42. Art Gallery
43. Ice Cream Production
44. Jewelry making
45. Travel agency
46. Natural Fruit Juice Production
47. Photography and Videography
48. Magazine Publication
49. Monogramming and Branding Services
50. Weight Loss Consultancy
51. Biscuit Production
52. Printing and Book Production
53. Private Library Services
54. Hairdressing Salon
55. Day Spa
56. Nail Studio (Manicure and Pedicure)
57. Selling Fruits
58. Selling honey
59. Affiliate marketing
60. Personal Fitness Instructor
61. Business broker
62. Car Wash and Detailing Services
63. Dating Service
64. Make-up Artist
65. Video game Center
66. Pharmaceutical company
67. Stock Photography
68. Art brokerage
69. Resume writing
70. Online Vitamin/Health Food Store
71. Virtual assistant
72. Pest control
73. Car Rentals
74. Nanny agency
75. Mail-order business
76. Ice block production
77. Night Clubs and Restaurants
78. Solar energy installation and equipment sales
79. Antique Furniture Sales
80. Laundry Service
81. Virtual Call Center
82. SEO Consultant
83. Gift Baskets
84. Disc Jockey (DJ)
85. Personal Shopper & Errand Service
86. Wine Production
87. Sports Collectible Shop
88. Funeral Arrangement Company
89. Oil Palm Plantation
90. Internet Radio Station
91. Online Clothing Store
92. Modeling and Event Ushering
93. Marketer/PR Agent
94. Fashion Stylist
95. Automobile Repairs and Fleet Management Services
96. Facility Management Services
97. Appliance Repair Service
98. House Painting
99. Alternative Power Supply
100. Security Gadget Sales and Installations.

ntyce:




Go back to economics 101 to understand why Tbills should pay the lowest in investments

so because all other investments have gone low govt must force tbills low too. Then no problem, we will all stop investing in it. Then let's see how they will manage.

This is a good news, is even lower than this in civilize country because it will make people to invest their money in setting up business instead of keeping it. The funniest thing is that those in government were the ones putting their money in TB that was why they make it high. I pray it even go down as low as 2 or 3%

somehow:


Has the payment of interest upfront always been so?

To the best of my knowledge, yes.
Unless the investor left instructions for it to be paid at maturity

Very good it should be reduced to 1% ppl should invest in the real sector n not just borrowing to FG

VicThory:
Is it for good or bad?
I don't understand

k2money:
This is a good news, is even lower than this in civilize country because it will make people to invest their money in setting up business instead of keeping it. The funniest thing is that those in government were the ones putting their money in TB that was why they make it high. I pray it even go down as low as 2 or 3%

Agreed. Fundamentally, tbills track inflation. So it's good because it indicates inflation is coming down, which is good news for everybody (consumers and investors). Ideally, it should hover around 3%.

Investors: since tbills track inflation, it really is just a way to preserve your purchasing power. The rate itself doesn't matter, but it might cause people to seek better returns by starting business or investing in stocks (instead of parking their money).

Consumers: well, it means the costs of goods shouldn't rise as dramatically over the next 12 months. Shouldn't, but this being Nigeria...

Businesses: the cost of borrowing should also go down because all these interest rates move in tandem - albeit at different offsets to the base inflation rate. In addition, CBN has threatened encouraged banks to give out more loans, and if the banks can't make as much in tbills, they might have incentive to give out loans at (hopefully) lower rates than we've seen.

EgunMogaji2:
Bad news for retirees like me who banked on the higher rates. This is still within budgeted range though. It could be good news if market price of things that we buy adjusts, but we know it won't.

Yes, for retired folks like EgunMogaji2, it can be a mixed bag... ideally his retirement income from tbills should be indexed to inflation, but we know prices of goods and services always ratchet up in Nigeria... though he should still benefit from the slower pace of inflation. In theory.

Flexherbal:
Everything in Nigeria is crashing, only taxes and bills are rising...

Let me concentrate on my herbs preparations.
Uncle Tony must not be a two minutes man, as his honeymoon starts this weekend. Anty Tacha must be satisfied.

If not that the business terrain in Nigeria is too rugged, who would have been investing in treasury bills!

It's not worth it.

pocohantas:


Hahaha. I found your comment funny and sincere.

I believe you have gotten the answers you seek. I also believe you know Tbills are government bonds and safest investment. Has a tenor of 91,182 and 364days.

Now they have crashed the rates, it is good news for government. They can source funds from US at a cheaper rate. Bad news for masses. It would put it almost at par with fixed deposit rates of some commercial banks. Which goes against the reason everyone jumped on it.

Anyway, it isn't so bad as people won't see much need for keeping funds idle. They might seek to invest in other sectors and businesses.

I fully comprehended all that u av said.. Thanks dear

Lukmanraji:

Hopefully cos our exam is coming up next month

Haba next month, it's not likely...

Can we link.. I wish to link with other banking and finance group.
I'm from Bayero University Kano but based in Lagos... Can u help me with that

abbiboy:

Flexherb i need ur herb.my bedmoon will start this weekend wit lamborghini help me out to satisfy her.SOS frm a broda!

At your service, Sir!

If inflation rate is in double digits and treasury bill rates have been crashed to single units, that means rates have become negative. That isn't right.

That means means monetary policy has become looser. But why?

First and simple theory is that government wants to crash rates in order to reduce the cost of borrowed to help stimulate the economy.

Another reason could be that because this government has borrowed so much, lower rates will reduce the burden of servicing the huge debt mountain.

A looser monetary is very risky as it is inflationary. It can also lead to a weakening of the Naira, a weakening the president will reject, a rejection that will cause serious damage to the economy as it did on 2015-2017

You misunderstood me... I graduated from banking and finance.. I just felt like asking,crossing my fingers it might be my school( that feeling of oh this person is doing my course and everything) sorry

DenreleDave:



So that u can mock me Abi.. Oya how many management students can interpret this, even masters student.. Bcox I don't know, u wana mock me..

Haba everything can be learnt in the class na

DenreleDave:


Haba next month, it's not likely...


Can we link.. I wish to link with other banking and finance group.

I'm from Bayero University Kano but based in Lagos... Can u help me with that

mail me
Lukmanraji@gmail.com

blastac:

You misunderstood me... I graduated from banking and finance.. I just felt like asking,crossing my fingers it might be my school( that feeling of oh this person is doing my course and everything) sorry

I'm sorry for misunderstanding you Bro..


I'm sorry

Lukmanraji:

mail me Lukmanraji@gmail.com

Just sent u a mail

No p... My lecturers wrote abt treasury bills but never thought them ... Even if they did I know I no listen..a friend explained it to me a day he bought his.. so yes you can't learn everything in class..

DenreleDave:

I'm sorry for misunderstanding you Bro..


I'm sorry

BrainSanitizer:

They are already planning to stop selling T bills to individuals.
Whatever is their reason, I don't think it's good enough to discourage investors.
It's their call anyway.

Really,...... must everything go corporate and the people continue to get ripped off.
I hope that doesn't work oh cossie I'm seriously considering it as passive investment

Flexherbal:


At your service, Sir!

How can i get the herbs sir!!

grandstar:
If inflation rate is in double digits and treasury bill rates have been crashed to single units, that means rates have become negative. That isn't right.

That means means monetary policy has become looser. But why?

First and simple theory is that government wants to crash rates in order to reduce the cost of borrowed to help stimulate the economy.

Another reason could be that because this government has borrowed so much, lower rates will reduce the burden of servicing the huge debt mountain.

A looser monetary is very risky as it is inflationary. It can also lead to a weakening of the Naira, a weakening the president will reject, a rejection that will cause serious damage to the economy as it did on 2015-2017

So, inflation should. be tackled at the expense of employment and growth

walexy100:


So, inflation should. be tackled at the expense of employment and growth

I too some extent understand where you're coming from.

However, the upside is higher levels of inflation which affects the poor the hardest. That means what you're giving with one hand, you are taking with the other.

Central Banks hate inflation and this policy is inflationary.

What government needs to do is to first reduce inflation to single digits- let's say 5 to 6%- and then bring treasury bill yields down as well.

The lending rate must always be higher than the inflationary rate or else you will lead to overborrowing and the stoking of inflation which inevitably has to be brought down

abbiboy:

How can i get the herbs sir!!

My contact is on my signature.

MohAbdullah:
despite being an economics student, I still don't understand all these analysis

I think someone should explain better for me

________________
Let me refresh your memory,.....

What happens when Government securities include treasury bonds, notes, and bills are put up for sale or govt buys securities?