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Treasury Bills In Nigeria - Investment (3) - Nairaland

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Fixed Deposits Or Treasury Bills, Which Is Better? / Fixed Deposit And Treasury Bill Investments From Abroad / I Need Information On Treasury Bills In Nigeria (2) (3) (4)

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Re: Treasury Bills In Nigeria by emsquare(m): 12:04pm On Mar 29, 2012
feelamong: A lot of people have been asking for some time what Tbills are all about and where they could buy the bills from,

This thread is dedicated for all issues related to Treasury Bills, their going rates, when Auctions are due and why they should be bought,

I am not a Finance person, am just a trader who was lucky to work in one financial insitution years back so I might not be the best person to answer questions on this as they come, But am sure we have a lot of financial gurus with CFAs in this Forum and all our questions would be answered,

Okay!
Re: Treasury Bills In Nigeria by dwyseone(m): 2:17pm On Mar 29, 2012
feelamong, u are appreciated, thanks for the information, information and its application rules the world.
Re: Treasury Bills In Nigeria by feelamong(m): 2:36pm On Mar 29, 2012
dwyseone: feelamong, u are appreciated, thanks for the information, information and its application rules the world.
Very well sir! well appreciated!!
Re: Treasury Bills In Nigeria by feelamong(m): 4:21pm On Mar 29, 2012
http://af.reuters.com/article/nigeriaNews/idAFL6E8ET5IJ20120329

(Reuters) - Nigeria's central bank said it plans to raise 917.76 billion naira ($5.82 billion) from treasury bills in the second quarter of the year, the bank said on Thursday.

The regulator said it would auction 182.12 billion naira worth in 91-, 182- and 364-day paper in March, 324.25 billion naira worth in April, 273.37 billion naira in May and 137.97 billion naira worth of the same tenor in June.

More offshore investors have been investing in Africa's second biggest economy's local debt since the beginning of the year because of attractive yields.

Nigeria, Africa's second biggest economy after South Africa, issues treasury bills regularly as part of monetary control measures to help lenders manage their liquidity. ($1 = 157.62 naira) (Reporting by Oludare Mayowa; Editing by Tim Cocks)
Re: Treasury Bills In Nigeria by ADint(m): 5:30pm On Mar 29, 2012
Why is the FG issuing risk-free Tbills at 15-16% Investors would still fall over themselves to buy at 8-10%!!! If banks can get 16% for risk-free, sleep-very-soundly-at-night Tbills why would they bother lending to any sector of the economy? They are looking at a juicy spread of over 10% without having to make any effort whatsoever!

Another very important question; How does the FG fund the huge interest payments? Is it affordable and sustainable? Hell no! For OMO yes the fg needs to issue local tbills but definitely not at those ridiculous rates! For other borrowings the govt needs to issue dollar dominated bonds at around 5% or so which would still be very attractive to foreign investors considering their virtual risk-free nature. China currently has over $1 trillion dollars invested in US tbills at less than 3% returns!

This is our usual govt's upside down way of thinking and doing things which in the end hurts our economy, enriches a few including foreigners, but the bulk of Nigerians pay the price!

11 Likes

Re: Treasury Bills In Nigeria by Prince2012: 10:07am On Mar 30, 2012
pls I want to know how to bid. Break it down cos I'm a complete novice on ds. Gratitude ur doin a gud job.

1 Like

Re: Treasury Bills In Nigeria by feelamong(m): 11:18am On Mar 30, 2012
Prince2012: pls I want to know how to bid. Break it down cos I'm a complete novice on ds. Gratitude ur doin a gud job.

In the real sence you do not actually have to bid like a normal auction. All you have to do is to write to your bankers/discount house telling them how much interest (discount) rate you are willing to accept inorder to borrow this your money to CBN (FGN).

At the last Aunction on wedensday, I wrote to my bankers that I wanted to bid for N2M Tbills at a rate of 14%. I choose this rate cos I did not want to loose out considering the fact that I know that the rates are now coming down form the highs of 16% seen 3 months ago. However i was given at 14.27%.

11 Likes

Re: Treasury Bills In Nigeria by Desanta(m): 12:11pm On Mar 30, 2012
Good day Sir and good work with the info you are providing.
Sir firstly, I want all the information on TB you have been sending to NL's. I live in Benin and I want contacts of organizations apart from the banks in Benin that can buy TB for me. Must you have a Current account to trade TB(COT on several millions is a lot)? My email address is kennedydesaint@yahoo.com. Thanks in advance.

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Re: Treasury Bills In Nigeria by feelamong(m): 1:08pm On Mar 30, 2012
Desanta: Good day Sir and good work with the info you are providing.
Sir firstly, I want all the information on TB you have been sending to NL's. I live in Benin and I want contacts of organizations apart from the banks in Benin that can buy TB for me. Must you have a Current account to trade TB(COT on several millions is a lot)? My email address is kennedydesaint@yahoo.com. Thanks in advance.

Am not sure you need a current account to trade on Tbills. I know a couple of people who use their savings account in their bank to do so. Just ask any of ur bankers in Benin. The coy i use have a good online presence just incase there is no discount house in Benin that can assist you on this. Am sure many others in lagos also have good online presence...but if you want me to introduce you to the guy that assist me ..then send me a mail to feelamong@gmail.com
Re: Treasury Bills In Nigeria by feelamong(m): 5:20pm On Mar 30, 2012
http://www.businessdayonline.com/NG/index.php/markets/bond-market/35264-nigeria-auctions-n81bn-in-treasury-bills

Nigeria sold 80.91 billion naira ($513 million) in treasury bills this week at a regular debt auction, with yields on the 91-day paper falling but returns on 182-day bills rising from the previous week, the central bank said on Friday.

The central bank sold N21.83 billion of the 91-day treasury bills at a 14.19 percent marginal rate, compared with a 14.30 percent yield at the previous auction.

The regulator auctioned N59.08 billion in the 182-day bill at 15.05 percent, a touch higher than the 15 percent previously.

Total demand stood at N148 billion compared with N326.57 billion at the last auction.

Nigeria, Africa's second biggest economy after South Africa, issues treasury bills regularly as part of monetary control measures to help lenders manage their liquidity
Re: Treasury Bills In Nigeria by Nobody: 5:49pm On Mar 30, 2012
Treasury bill offered by many governments all over the world is a means of borrowing from the public, or mop up excess liquidity , with the assurance of bullet paying back on maturity,and interest payment before maturity at stipulated periods either quarterly or bi-annually.Note that most banks demand minimum investment sum of #100k, with MPR ratio of 10-14% interest variable
Though bonds and treasury bills are backed up with full assets of governments or institutions offering such.
Timetable of auction of Nigeria treasury bill can be obtained from www.dmo.gov.ng

There's no big deal about investing on treasury bill or bonds, walk into any main branch of your bank and demand their requirement.
For example First bank, You must maintain account not less than 100+k with them, Application letter expressing your intent to invest in any offered bond,(you must tender this letter 48hrs)before date of auction. next auction is 11th April, Means of ID, Utility bill.

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Re: Treasury Bills In Nigeria by MagedMelio: 10:35am On Mar 31, 2012
T Bills are guaranteed interest financial instrument even if it may have lower return than stokes in the Stock Market.

Good idea for some financial institutions is to issue instruments with nominal value, that combines stocks, bonds, and t Bills.
That's will achieve more revenue for the institutions and trader as well.

Maged Melio
CPA [in progress]
National Bank of Egypt Specialist
Re: Treasury Bills In Nigeria by chemashie(m): 4:40pm On Mar 31, 2012
What is the minimum amount i can use to buy the T-Bills and where can i buy it? I need more knowledge on this please. Thank you.
Re: Treasury Bills In Nigeria by Nobody: 6:50pm On Mar 31, 2012
chemashie: What is the minimum amount i can use to buy the T-Bills and where can i buy it? I need more knowledge on this please. Thank you.
chemashie: What is the minimum amount i can use to buy the T-Bills and where can i buy it? I need more knowledge on this please. Thank you.

One hundred Thousand Naira Only (100,000.00)
Re: Treasury Bills In Nigeria by feelamong(m): 8:19pm On Mar 31, 2012
chemashie: What is the minimum amount i can use to buy the T-Bills and where can i buy it? I need more knowledge on this please. Thank you.

N100k is the minimum amount but most banks actualy demand for more than this....You can walk into any bank or discount house to buy the treasury bills but as a condition most of them demand that you have a current account (for the KYC issue)
Re: Treasury Bills In Nigeria by florencejoyB: 6:59am On Apr 02, 2012
I think, it is a best investment as most people pay on their bills.

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Re: Treasury Bills In Nigeria by yogun(f): 4:20pm On Apr 02, 2012
I am interested in Tbills but the discount houses i've contacted have insisted on 1m as minimum investment deposit. "Feelamong" also tried to assist me and it was the same. Pls if there's anyone here that knows how 100k but less than 1m can be invested, kindly get in touch with me...

many thanks

3 Likes

Re: Treasury Bills In Nigeria by filani(m): 1:56pm On Apr 04, 2012
@ feelamong
Nice work ur doing here brother! Kindly assist me by doing the calculation for N8 Million at 14% for 91 days ,thnks smiley
Re: Treasury Bills In Nigeria by feelamong(m): 2:55pm On Apr 04, 2012
filani: @ feelamong
Nice work ur doing here brother! Kindly assist me by doing the calculation for N8 Million at 14% for 91 days ,thnks smiley

lets say the discount rate is 14% for 1 year.
you will pay N6,880,000.
if you hold to maturity = (8,000,000- 6,880,000)/6,880,000 * 100 = 16.27%

In essence if you hold for one year ur effective yield is N1,301,600

In simple terms if you only hold for 91 days you will have N1,301,600/4 = N325,400

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Re: Treasury Bills In Nigeria by otokx(m): 3:11pm On Apr 04, 2012
is there no tax component to this?
Re: Treasury Bills In Nigeria by Seun(m): 3:13pm On Apr 04, 2012
Treasury bill returns are not subject to with-holding tax.

1 Like

Re: Treasury Bills In Nigeria by feelamong(m): 3:33pm On Apr 04, 2012
otokx: is there no tax component to this?

Treasury Bills are TAX FREE and UPFRONT DISCOUNTED!

1 Like

Re: Treasury Bills In Nigeria by feelamong(m): 4:52pm On Apr 04, 2012
http://af.reuters.com/article/nigeriaNews/idAFL6E8F4AA920120404

LAGOS, April 4 (Reuters) - Nigeria's central bank said on Wednesday it would auction 183.64 billion naira ($1.17 billion) in treasury bills at its regular monthly debt auction next week.

The central bank said it would sell 30.15 billion naira in 91-day paper and 73.49 billion naira in 182-day bills and 80 billion in 364-day bills next Wednesday.

Nigeria, Africa's second biggest economy after South Africa, issues treasury bills regularly to reduce money supply, curb inflation and help lenders manage their liquidity.

Yields on the papers were mixed at the last auction with yields on the 91-day paper falling, while returns on 182-day bills rose.
Re: Treasury Bills In Nigeria by webstradamus: 5:25pm On Apr 04, 2012
feelamong: http://af.reuters.com/article/nigeriaNews/idAFL6E8F4AA920120404

LAGOS, April 4 (Reuters) - Nigeria's central bank said on Wednesday it would auction 183.64 billion naira ($1.17 billion) in treasury bills at its regular monthly debt auction next week.

The central bank said it would sell 30.15 billion naira in 91-day paper and 73.49 billion naira in 182-day bills and 80 billion in 364-day bills next Wednesday.

Nigeria, Africa's second biggest economy after South Africa, issues treasury bills regularly to reduce money supply, curb inflation and help lenders manage their liquidity.

Yields on the papers were mixed at the last auction with yields on the 91-day paper falling, while returns on 182-day bills rose.

Re: Treasury Bills In Nigeria by feelamong(m): 7:46pm On Apr 04, 2012
webstradamus:

How can one tap into this? Please send me (webstradamus AT gmail DOT com) your contact email/phone so I can reach you for more personal advice. Thanks!

i have replied ur mail...

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