katamo:


The DMO and CBN need to do better job at coordinating their issuance strategy.

The interest rates being offered for these bonds are ridiculous relative to what one can get in the T Bills market. Imagine an interest rate of 13.817% for the 2-year bond versus 22% (true yield on 1-year T Bill)? What this effective means is that in order for the 2-year bond to be attractive, you have to believe that the true yield on the 1-year T Bill will have to drop to below 6.22% after one year. The likelihood of this happening is almost non-existent.

Brothers, if you are considering investing in these bonds I urge you to reconsider. We are much better off investing in T-Bills. The only advantage I can see is that the minimum subscription is N1,000. This is a joke.

You cannot get a true picture with your analysis. DMO and CBN know what they are doing.

First of all, ask yourself what is current rate for 91 day treasury bills. Now what is the coupon period for Savings bond. Its the same period. Savings bond pays coupons every 3 months. If you want to know what rate the savings bond go for, always look at 91 day treasury bills. Its usually around it. If you look at the regular FGN bonds which pay coupons twice in a year, the rate is usually higher than that of savings bond.

Now back to treasury bills. These are happy times for rates because of the bad state of the economy. I encourage anyone to cash in on it for now. The rates cannot continue like this. If you buy a savings bond for 3 years, you are very sure of your interest which is fixed throughout the life of the bond. Treasury bills on the other hand could fluctuate during the same 3 year period. The bill you buy at 18% today may go for 10% after maturity and you want to renew. let me give you a little history

August 2008, 364 day treasury bills was around 9.4%
August 2009, there was no 364 day but 182 days tenor was around 4.5%
August 2010, 364 day tenor treasury bills was between 4% and 4.5%

This is to show you that the rate you see today, you may not see it any more. It could even go higher. One of the essence of buying a bond is to save yourself from the headache of speculating rates fluctuations. With a bond, the rate you tie down is fixed throughout the life span.

If you are a good speculator and you feel that from the year 2018 up until after election year, treasury bills rates will be high, then its time you avoid savings bond. If you think that the rates will go lower below 10%, then its time you lock up a savings bond. If treasury bills rate go to as low as 10%, a savings bond bought then will be even lower. Its all about speculating and getting it right.

if you do a mix of the two, it is better.

unite4real:


You cannot get a true picture with your analysis. DMO and CBN know what they are doing.

First of all, ask yourself what is current rate for 91 day treasury bills. Now what is the coupon period for Savings bond. Its the same period. Savings bond pays coupons every 3 months. If you want to know what rate the savings bond go for, always look at 91 day treasury bills. Its usually around it. If you look at the regular FGN bonds which pay coupons twice in a year, the rate is usually higher than that of savings bond.

Now back to treasury bills. These are happy times for rates because of the bad state of the economy. I encourage anyone to cash in on it for now. The rates cannot continue like this. If you buy a savings bond for 3 years, you are very sure of your interest which is fixed throughout the life of the bond. Treasury bills on the other hand could fluctuate during the same 3 year period. The bill you buy at 18% today may go for 10% after maturity and you want to renew. let me give you a little history

August 2008, 364 day treasury bills was around 9.4%
August 2009, there was no 364 day but 180 days tenor was around 4.5%
August 2010, 364 day tenor treasury bills was between 4% and 4.5%

This is to show you that the rate you see today, you may not see it any more. It could even go higher. One of the essence of buying a bond is to save yourself from the headache of speculating rates fluctuations. With a bond, the rate you tie down is fixed throughout the life span.

If you are a good speculator and you feel that from the year 2018 up until after election year, treasury bills rates will be high, then its time you avoid savings bond. If you think that the rates will go lower below 10%, then its time you lock up a savings bond. If treasury bills rate go to as low as 10%, a savings bond bought then will be even lower. Its all about speculating and getting it right.

if you do a mix of the two, it is better.

Excellent Analysis.....!!!!!!!

@unite4real, #300,000 In TB for 63days @16% what will be the profit ?

I was at First bank this morning and was told forms for primary bid had already gone.
The manager persuaded me' vehemently' to do fixed deposit while I wait for 2 weeks time.

I later requested for secondary market and the told me to fill d form first before knowing the rate...


I think they are being shady ..so I didnt do anyone
.

ihedioramma:
@unite4real, #300,000 In TB for 63days @16% what will be the profit ?

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unite4real:

N8,307.69

too small for two months and ?, what of 91days ?

yomi007k:
I was at First bank this morning and was told forms for primary bid had already gone.
The manager persuaded me' vehemently' to do fixed deposit while I wait for 2 weeks time.

I later requested for secondary market and the told me to fill d form first before knowing the rate...


I think they are being shady ..so I didnt do anyone
.

It seems this week's auction is shrouded in secrecy. There is no information on it from CBN or anywhere.

unite4real:


You cannot get a true picture with your analysis. DMO and CBN know what they are doing.

First of all, ask yourself what is current rate for 91 day treasury bills. Now what is the coupon period for Savings bond. Its the same period. Savings bond pays coupons every 3 months. If you want to know what rate the savings bond go for, always look at 91 day treasury bills. Its usually around it. If you look at the regular FGN bonds which pay coupons twice in a year, the rate is usually higher than that of savings bond.

Now back to treasury bills. These are happy times for rates because of the bad state of the economy. I encourage anyone to cash in on it for now. The rates cannot continue like this. If you buy a savings bond for 3 years, you are very sure of your interest which is fixed throughout the life of the bond. Treasury bills on the other hand could fluctuate during the same 3 year period. The bill you buy at 18% today may go for 10% after maturity and you want to renew. let me give you a little history

August 2008, 364 day treasury bills was around 9.4%
August 2009, there was no 364 day but 182 days tenor was around 4.5%
August 2010, 364 day tenor treasury bills was between 4% and 4.5%

This is to show you that the rate you see today, you may not see it any more. It could even go higher. One of the essence of buying a bond is to save yourself from the headache of speculating rates fluctuations. With a bond, the rate you tie down is fixed throughout the life span.

If you are a good speculator and you feel that from the year 2018 up until after election year, treasury bills rates will be high, then its time you avoid savings bond. If you think that the rates will go lower below 10%, then its time you lock up a savings bond. If treasury bills rate go to as low as 10%, a savings bond bought then will be even lower. Its all about speculating and getting it right.

if you do a mix of the two, it is better.

guru

NL1960:


It seems this week's auction is shrouded in secrecy. There is no information on it from CBN or anywhere.

But apart from that, why will dey tell me to fill form for secondary market without letting me know the available rate.


The guy said I will know d rate after the transaction. ...I hv always done secondary market n oda banks tell u d rate b4 transaction.

yomi007k:


But apart from that, why will dey tell me to fill form for secondary market without letting me know the available rate.


The guy said I will know d rate after the transaction. ...I hv always done secondary market n oda banks tell u d rate b4 transaction.

that's unacceptable

Please has anybody successfully submitted instructions for tommoros auction with any other bank aside stanbic today?

kristien4:
that's unacceptable

As in....better one chance.

Those ppl are fraudulent. I just might report them.

ihedioramma:
too small for two months and ?, what of 91days ?

that will be 12K if its still @16%

Please what's the minimum amount that can be invested in treasury bill

Olarewajub:
Please what's the minimum amount that can be invested in treasury bill

One Thousand Naira ( N1,000 ) Only.

bisiki2:

One Thousand Naira ( N1,000 ) Only.

If i invest 500k in 30 days, what will be my return.

Uba just message that my application for 364days will not go through as there is no auction tomorrow... confirmations pls?

Olarewajub:


If i invest 500k in 30 days, what will be my return.

I=(P*R*T) - Taxes( i.e deductibles )

Where I = Interest i.e your return
P= Principal i.e your N500,000
R= Rate i.e expressed in fraction 12/100 or in percentage 0.12(the investment house will provide this figure based on what is available)
T = Time i.e 1/12 for one month.........12/12 for one year

To answer your question sir, I do not know the rates available or offered to you.

punae:
Uba just message that my application for 364days will not go through as there is no auction tomorrow... confirmations pls?

Try and contact other Branches to verify their claims..

unite4real:


You cannot get a true picture with your analysis. DMO and CBN know what they are doing.

First of all, ask yourself what is current rate for 91 day treasury bills. Now what is the coupon period for Savings bond. Its the same period. Savings bond pays coupons every 3 months. If you want to know what rate the savings bond go for, always look at 91 day treasury bills. Its usually around it. If you look at the regular FGN bonds which pay coupons twice in a year, the rate is usually higher than that of savings bond.

Now back to treasury bills. These are happy times for rates because of the bad state of the economy. I encourage anyone to cash in on it for now. The rates cannot continue like this. If you buy a savings bond for 3 years, you are very sure of your interest which is fixed throughout the life of the bond. Treasury bills on the other hand could fluctuate during the same 3 year period. The bill you buy at 18% today may go for 10% after maturity and you want to renew. let me give you a little history

August 2008, 364 day treasury bills was around 9.4%
August 2009, there was no 364 day but 182 days tenor was around 4.5%
August 2010, 364 day tenor treasury bills was between 4% and 4.5%

This is to show you that the rate you see today, you may not see it any more. It could even go higher. One of the essence of buying a bond is to save yourself from the headache of speculating rates fluctuations. With a bond, the rate you tie down is fixed throughout the life span.

If you are a good speculator and you feel that from the year 2018 up until after election year, treasury bills rates will be high, then its time you avoid savings bond. If you think that the rates will go lower below 10%, then its time you lock up a savings bond. If treasury bills rate go to as low as 10%, a savings bond bought then will be even lower. Its all about speculating and getting it right.

if you do a mix of the two, it is better.

You do make a lot of valid points, sir, much of which I agree with. Having a balanced portfolio with mix of short-term T Bill and longer term government bonds is good as you can take advantage of the currently high T Bill rates and also lock in rates for longer terms in the bond market.
I beg to differ on a few things though. The point I made is more specific to the offered interest rate on the 2-year savings bond. I will not speculate on anything more than two years as that is too far out for anyone to predict where rates will go by then.
My view on investing is from a total return perspective so I am less concerned about frequency of interest payments versus my overall return when I compare investment options. As you probably know, total return will take into account different interest payment profiles and allow you compare oranges with oranges.
As I mentioned previously, the true yield on 1-year T Bills will need to about to almost 6.2% when you reinvest on one year for you as an investor to better off from a total return perspective. As you rightly pointed out, you have to go back as far as 2009 and 2010 (the period with the lowest T Bill rates in recent history) to find T Bill true yields below 6%. However, it is important to put this in the context of the economic environment prevailing at the time. The world was witnessing the worst financial crisis of our times which started in 2008 but really reach full scale in 2009 and 2010 and started to ease after that.
As you probably know, deposit and lending rates track the CBN monetary policy rate. Many countries across the globe engaged in large cuts to their benchmark interest rates in order stimulate their economies and keep themselves out of recession. This included us as well. CBN dropped the benchmark monetary policy rate from 10.25% in June 2008 to 6% by July 2009. This type of radical cuts to interest rates only happen in extreme situations. Typically the rates will change by 0.25% to 0.5% every couple of months when the monetary policy team meets. So I take any economic and financial analysis that relies on data from 2008 to 2010 with a grain of salt just given the situation at the time.
Currently, we are not in a period of economic shock so I certainly do not see 1-year T Bill rates going to 6% by this time next year. The benchmark MPR is currently at 14% since July of last year. Even though we were technically in a recession CBN has not cut the rates (likely because inflation is so high). The likelihood of a large cut between now and next year is very, very low.
My point is that I do not view the offered rate on the 2-year savings bong of 13.817% as attractive. I will take my chance with investing in 1-year T Bill because I view the reinvestment risk associated with T Bill rates as low as 6% one year from now as minimal.

MostBlessed:
Thanks bro.... I will call my account manager to find out more

Why do you want to call him?
To find out more of what?
I pity you. He will do everything possible to frustrate the move and discourage you because it does not pay him nor the bank for you to move your funds from either fixed, savings or current account to do Treasury Bills in their bank not to talk of moving it somewhere else. He may even tell you lies about Treasury bills

The moment you inform him about it, your troubles with him and the bank will start.

In your own interest, just move to another branch of Zenith your present bank and do a transfer to the new bank account and don't ever disclose your reasons for the movement to ANYBODY else they turn against and frustrate you.

Also don't ever allow them to postpone the movement under any guise and insist that the movement must be effected immediately or do an App transfer or Internet banking depending on the amount involved.

"TO BEFORE WARNED IS TO BEFORE HARM"

NL1960:


The situation is confusing as Iam still yet to see the CBN 4th quarter TB calendar. The TB officer in my branch said that she called head office as she promised me last Friday and she was told that she can now start accepting and that was why she now called me to come. Iam waiting for what will happen. If there is no auction, my money remains in my account.

✔✔✔ very good reasoning!

bisiki2:


I=(P*R/T) - Taxes( i.e deductibles )

Where I = Interest i.e your return
P= Principal i.e your N500,000
R= Rate i.e expressed in fraction 12/100 or in percentage 0.12(the investment house will provide this figure based on what is available)
T = Time i.e 1/12 for one month.........12/12 for one year

To answer your question sir, I do not know the rates available or offered to you.

Thank you for your response. I've already sent my bank a mail to tell me their interest rate.

Between NTB and mutual fund, which is profitable for short term investment?

According to information on this site, it states that "anyone who wishes to buy Treasury Bills but does not have up
to N50 million must buy through a bank in the secondary market."


www.nairametrics.com/nigeria-launches-fgn-bonds-stops-sale-of-treasury-bills-to-anyone-who-doesnt-have-n50-million/


Please i need clarification on this policy.

TONY56:



Why do you want to call him?
To find out more of what?
I pity you. He will do everything possible to frustrate the move and discourage you because it does not pay him nor the bank for you to move your funds from either fixed, savings or current account to do Treasury Bills in their bank not to talk of moving it somewhere else. He may even tell you lies about Treasury bills

The moment you inform him about it, your troubles with him and the bank will start.

In your own interest, just move to another branch of Zenith your present bank and do a transfer to the new bank account and don't ever disclose your reasons for the movement to ANYBODY else they turn against and frustrate you.

Also don't ever allow them to postpone the movement under any guise and insist that the movement must be effected immediately or do an App transfer or Internet banking depending on the amount involved.

"TO BEFORE WARNED IS TO BEFORE HARM"

Wow...same thing happened to me today...

Im moving to another first bank branch cos d ones I met wanted to frustrate my deals.

Sterling bnk debited me dis evening wit d face value. I applied for 364days

Dis might help
https://www.fmdqotc.com/services/listings-and-quotation/securities-quotations/t-bills/

is the fg bond is on?

yomi007k:


Wow...same thing happened to me today...

Im moving to another first bank branch cos d ones I met wanted to frustrate my deals.

If you still want to stay with your first bank, you don't need to open another account.

All you need do is to do your transactions through another branch where your account officer will not see you and don't act like a newbie when you meet the Treasury Bills officer.

You see, many people cause the hostilities they encounter when they want to start doing Treasury Bills by informing their accounts officer probably because they are not aware that it does not pay him and the bank for you to exit savings or fixed deposit for Treasury Bills.

When you want to exit fixed deposit for Treasury Bills, you will be doing yourself a lot of harm by telling your accounts officer your real intentions. Just tell him that you are no longer interested in fixed deposits and want your money in savings for savings interests only so that you can take it within minutes anytime you need it without going to the bank to fill and sign papers and do your Treasury Bills through another bank

TONY56:



If you still want to stay with your first bank, you don't need to open another account.

All you need do is to do your transactions through another branch where your account officer will not see you and don't act like a newbie when you meet the Treasury Bills officer.

You see, many people cause the hostilities they encounter when they want to start doing Treasury Bills by informing their accounts officer probably because they are not aware that it does not pay him and the bank for you to exit savings or fixed deposit for Treasury Bills.

When you want to exit fixed deposit for Treasury Bills, you will be doing yourself a lot of harm by telling your accounts officer your real intentions. Just tell him that you are no longer interested in fixed deposits and want your money in savings for savings interests only so that you can take it within minutes anytime you need it without going to the bank to fill and sign papers and do your Treasury Bills through another bank

Thank u....I concur.

But I have email this branch activities to the head office and cbn.