Thanks

Ibrahim505:


i-invest app

I see what you mean, the N510/$ was an example, in Nigeria things easily get out of hand, it may go up to N950/$ in 5 years from now.

The Buhari govt will even borrow usd and pump into the Nigerian market to ensure they get a second tenure, the $ 42 billion reserve is only on paper, the impact on the society is never felt. When the govt. steps down that is when we will truly know the value of Naira.

The other instruments you mentioned like US bond is good but only for US residents.

Eurobonds is only for USD which is limited for a lot of Investors.

There is an option for foreigners in most countries to buy off shore properties which can generate rental income but it is capital intensive.

TB would have been sweeter if the Naira was stable, a car you can buy now with N10m will likely cost N20m in 5 years time. That's the effect of an ailing economy, there was a good reason Abacha webt to Swiss

Let us hope Nigerian will not get to this point in the pics.

awesomeJ:

While I certainly agree with you sir on the need to hedge ogainst currency risk, We also need to fully explore the alternatives:

1. Doing NTBs at 14% average yield will turn your $100k to about $141k in 5 years should the naira crash from 360 to 510 in that period.

2. stashing your $100k in your dorm account would leave you with about $99k or less in 5 years.

3. doing US bonds, bills or notes at about 4% would turn the $100k to about $121k.

4. doing eurobonds at about 7% average would leave you with 140k.

However like I often like to think, timing is really key with investments.

Some people bought dollars at 250 and sold at 510, while some others bought at 520 only to sell at 380.

Investment should be a smart man's business.

Happy new month to us all!

Indigbo:


Ok, is it possible all my 9.6 could be wiped out just like that because of inflation or its only the profit that can be wiped out? i thought capital is 100% guarantee even if all profit is wiped out because of inflation or whatever?

I am 100% sure this guy is being sarcastic

https://abokifx.com/news/you-ll-lick-your-wounds-again-emefiele-tells-currency-speculators-as-naira-falls





Emeifele vs speculators part II

Grupo:
I am 100% sure this guy is being sarcastic

sarcastic? u're on ur own sir. i'm trying to play safe u talking sarcastic. i've gotten d information i want & am satisfied.

awesomeJ:
few opinions:

First, I don't see the naira suffering any major loss in the near term. Earlier last year there were projections, and even "prophecies " that the dollar would reach 1000. Most analayst earlier this year forecast 410 as what the official rate would be around November. It was yet relatively stable.

Reserves will certainly find support at the $40bn mark. It's actually back up above $42bn. Oil prices will likely climb back above $60 for each Brent barrel.

one thing with my forecasts though is that I can influence things spiritually to make them true.

If you ask me, except you're buying euro bonds at 8% or more, NTB at 16% yield currently makes for a better deal-at least for the next few years.


On how NTB helps the naira, IT CERTAINLY DOES. REALLY WELL ACTUALLY.

You see, for most folks, dollar is sourced directly or indirectly through the CBN.
Now when you want to buy, you must have the naira to bid at the auction.

At any point in time, even though banking system assets are above N36tn, the liquid portion that can be used for banks for any purchase or payment is often just about 1%. N360bn. There are times the entire banking system doesn't even have up to N100bn.

So at such at time, if the CBN offers say $500m for sale at an FX auction, it may not get to sell more than $200m. basically cos it had succeeded in draining liquidity via OMO.

If proceeds of NTB and FGN bond auctions hit the system hit the banking system today via FAAC disbursement, you may see system liquidity rising to say 700bn, but it won't be more than just a few days before the CBN sucks the excess up via OMO, so that by the time they're having an FX auction, there'd be just enough funds to make a limited bid for FX.

So, while proceeds of NTB, and FGN bonds get back into the system via government spending, the CBN sucks up whatever they consider excess from time to time via OMO, this time, OMO cash stays with the CBN, and doesn't get back into the system until whenever they want. So it's just than banks' claims on the CBN that rise, liquidity may be pretty low.

Now why does the rate have to be high.

Well basically, the fact that the CBN wants to suck up via OMO does not mean banks are under any obligation to buy those bills. It's a choice a bank's management would have to make between keeping dollar assets to reap potential revaluation gains and buying naira debt assets to earn juicy interest. so the rates have to be juicy.

In 2016, while GUARANTY had close to N100bn in revaluation gains, ACCESS actually had a revaluation loss, implying that the way banks choose to manage and denominate their balance sheets is entirely up to them.

I'm quite happy with the MPC guys and I'd give them kudos for their job with the naira.

Well explained..

ahiboilandgas:
what should we do otherwise since we are Nigerians not Americans we should believe Trump?don't get u points

GonFreecss1:


Bro. You will always get your Principal and even the interest. Tbills is safe, very safe, when it comes to your naira returns.

All I have been talking about is buying power over time. Inflation cannot just wipe out your naira, that's not what it does.

Just take for instance when we used to buy sweets and chewing gum with kobo, now 1 tom tom is 10 naira. That's all I have been talking about in a nutshell. Sorry if I scared you sir, I apologize.

Nice one !

vacanci:


If I remembered vividly, after the roadshow, our last Eurobond was over subscribed.

Can you help us breakdown and analys these 3 scenarios.

1. Mr A has 10M. He investment in a Treasury bills or bond at prevailing rate. Let's say between 14 and 15 percent for the next 5 years. After 5 years, convert his total amount principal and interest compounded to Dollar at say N510 per dollar like some me one suggested on this thread.

2. Mr B has 10M. He bought dollars with all of them at prevailing exchange rate today let's say between 365 and 370 naira to a dollar. He invested the dollar at a given rate of 2% in fixed deposit so he can cash out anytime there is panic. Remember we have seen dollars dropped from 520 to 360.

3. Mr C has 10M. He bought dollars with all of them as above and investment in eurobond for 5years at prevailing interest rate say between 6 and 7 percent.

Recall that a 5 year eurobond can't give u 7%. Prevailing rate for 5year maturity is around 6%. So you don't need to use the wider margin to calculate since it's not 20 year bond.

At the end of 5 years let all the guys convert their money to common currency, dollar or naira. Let's see the picture of all these argument.

It's not for us to just be loyal to the dollar simply because of the name as if you buy garri with it or pay house rent with it.

Please who has been able to arrive at an answer for the three scenarios above?

I'm not sure the result of the maths I did was correct and would like to compare.

purleesh:


Please who has been able to arrive at an answer for the three scenarios above?

I'm not sure the result of the maths I did was correct and would like to compare.

the problem is the 510 rate it theoretical cos naira can go to 700 in 5 years time or decline to 300...from 2014 to 2018 a 120 devalution happened so 2019-2024? If it happen naira might jump to 720 to a dollar ...dollar is more stable more than naira hence u can predict

ahiboilandgas:
the problem is the 510 rate it theoretical cos naira can go to 700 in 5 years time or decline to 300...from 2014 to 2018 a 120 devalution happened so 2019-2024? If it happen naira might jump to 720 to a dollar ...dollar is more stable more than naira hence u can predict

I understand...not just 510/$ but also the TBill rate averaging 14% is also hypothetical. It could be more or less.
I believe the scenarios are just to have a general understanding of how things could play out.

Please what figures did you arrive at for the 3instances?

purleesh:


I understand...not just 510/$ but also the TBill rate averaging 14% is also hypothetical. It could be more or less.
I believe the scenarios are just to have a general understanding of how things could play out.

Please what figures did you arrive at for the 3instances?

investor A 39000 dollars B 31000 C 37000 dollars ...the naira treasury bill investor gains more

Jonathan:

Exactly!
I was trying to introduce one of my friends to TBills/Federal Government of Nigeria bonds /mutual funds and the likes. I even tried to persuade him to open a stockbrocking account . I swear the way he reacted eh !
Dude probably wasn’t convinced he won’t lose his money or something. I don’t understand.
I will never try to persuade anybody again to buy securities or even give anyone any financial advice .
Except my kids

And that is how only a few will continue to be richer than all.

I can't come and kee ma self to epp someone... Cross things

As for me and my house we will follow the richest man in Babylon way.

purleesh:


I understand...not just 510/$ but also the TBill rate averaging 14% is also hypothetical. It could be more or less.
I believe the scenarios are just to have a general understanding of how things could play out.

Please what figures did you arrive at for the 3instances?

Below is one reason why speculators might get their hands burnt. I don't see dollar skyrocketing the way we experienced it lately. CBN has learned a lot from that and are better prepared.

https://www.thisdaylive.com/index.php/2018/12/01/emefiele-nigerias-monthly-import-bill-drops-from-665-4m-to-160-4m-promises-to-sustain-stability-in-the-forex-market/

ahiboilandgas:
the problem is the 510 rate it theoretical cos naira can go to 700 in 5 years time or decline to 300...from 2014 to 2018 a 120 devalution happened so 2019-2024? If it happen naira might jump to 720 to a dollar ...dollar is more stable more than naira hence u can predict

Below is one reason why speculators might get their hands burnt. I don't see dollar skyrocketing the way we experienced it lately. CBN has learned a lot from that and are better prepared.

https://www.thisdaylive.com/index.php/2018/12/01/emefiele-nigerias-monthly-import-bill-drops-from-665-4m-to-160-4m-promises-to-sustain-stability-in-the-forex-market/

ahiboilandgas:
investor A 39000 dollars B 31000 C 37000 dollars ...the naira treasury bill investor gains more

Thank you sir. I arrived at the same conclusion.

I think the best bet is closely watching the indices you earlier posted while being invested in TBill so one doesn't get caught off guard by a straighton devaluation of the Naira.

And for a period as this when one could be in doubt of wether they'll eventually devalue or not despite all assurances to the contrary, it's better to play safe and convert to Forex holdings till a period well after the elections.

The opportunity cost of holding the foreign currency is the amount one wudav gained by investing in TBill for that same period but it's actually not much compared to the forex gains one would accrue assuming one's fears are confirmed.

unite4real:


Below is one reason why speculators might get their hands burnt. I don't see dollar skyrocketing the way we experienced it lately. CBN has learned a lot from that and are better prepared.

https://www.thisdaylive.com/index.php/2018/12/01/emefiele-nigerias-monthly-import-bill-drops-from-665-4m-to-160-4m-promises-to-sustain-stability-in-the-forex-market/

Free this people abeg.. Let them do their dollar and whatever thing. Everyone has a choice Na. Na dem sit down with Cbn dey do meeting say naira go reach #1000.. Leave them. Make e reach $1000

unite4real:


Below is one reason why speculators might get their hands burnt. I don't see dollar skyrocketing the way we experienced it lately. CBN has learned a lot from that and are better prepared.

https://www.thisdaylive.com/index.php/2018/12/01/emefiele-nigerias-monthly-import-bill-drops-from-665-4m-to-160-4m-promises-to-sustain-stability-in-the-forex-market/

Hopefully, it all works out as he planned.
National politics effects on the economy is way too much for those one off plans

purleesh:


Hopefully, it all works out as he planned.
National politics effects on the economy is way too much for those one off plans

very nice my problem with Nigeria economy and it strange behaviours import bill drop by 80 percent meaning more forex but why is the naira not appreciating to 250 ? Rice import has quadouble in Benin republic ?in that period

ahiboilandgas:
very nice my problem with Nigeria economy and it strange behaviours import bill drop by 80 percent meaning more forex but why is the naira not appreciating to 250 ? Rice import has quadouble in Benin republic ?in that period

A huge disalignment sir...what is on paper largely differs from the realities on ground.

Reading the posts here have been very enlightening, brushing mumu sentiments off my investment strategies. It'll be a great shame afterall if I allow my hard-earned fund be shortchanged again.

If naira gains, we will all be happy, but the reality on ground is different from all this paper news.

those saying we are sitting down with cbn should rather analyse facts and leave us alone, we want a strong naira like u, but would rather hedge against any fluctuations.

We r entitled to our opinion


In other matters plzzzzzz......does anyone have access to cbn 2019 TB calender.

Inflows from FAAC, Maturing T-Bills to Boost Liquidity, Ease Rates
https://businesspost.ng/2018/12/03/inflows-from-faac-maturing-t-bills-to-boost-liquidity-ease-rates/

zamirikpo:
If naira gains, we will all be happy, but the reality on ground is different from all this paper news.

those saying we are sitting down with cbn should rather analyse facts and leave us alone, we want a strong naira like u, but would rather hedge against any fluctuations.

We r entitled to our opinion


In other matters plzzzzzz......does anyone have access to cbn 2019 TB calender.

The more people hedge the more likely the naira will be devalued.

Just thought I'd throw that out there.

Freedem:



The more people hedge the more likely the naira will be devalued.

Just thought I'd throw that out there.

Nope. You have it the other way round. The more it is devalued the more people would hedge.

I am beginning to think you guys I trying to heap optimism on an outcome you all know optimism can't help.

If the naira is stable people won't have a need to hedge, no one would even be thinking about it.

I will say this and I will say it again, how many of you low risk takers support Nigerian businesses? Buy stocks? Specifically businesses that will go on to export goods and services that earn forex that would ultimately increase supply of said forex? Because that is the only way. If supply is greater than demand. The truth is, many of you are fine with the Tbills low risk, which is okay, many more are fine with fixed deposits and many many more are fine with leaving their money in their bank accounts, and the banks? They are not lending anyone money, they are buying Tbills up and snacking on it like breakfast.

So I am wondering how a select few in Nairaland or a select few of Nigerians that choose to invest will create more devaluation for the naira, when the way the country is run does that exactly.

The funny part about this argument is if we begin to ask people what they think of this current Administration, many wouldn't have any good thing to say. I am now wondering why people have decided to be optimistic about whatever said government says about the economy you are complaining about. It's surprising and it's also not. My conclusion is bias, because of the low risk easy money. Many can't phantom a world without Tbills, a world without a low risk investment. A world with only high risk stocks is a no-no for them. That's my opinion.

GonFreecss1:


Nope. You have it the other way round. The more it is devalued the more people would hedge.

I am beginning to think you guys I trying to heap optimism on an outcome you all know optimism can't help.

If the naira is stable people won't have a need to hedge, no one would even be thinking about it.

I will say this and I will say it again, how many of you low risk takers support Nigerian businesses? Buy stocks? Specifically businesses that will go on to export goods and services that earn forex that would ultimately increase supply of said forex? Because that is the only way. If supply is greater than demand. The truth is, many of you are fine with the Tbills low risk, which is okay, many more are fine with fixed deposits and many many more are fine with leaving their money in their bank accounts, and the banks? They are not lending anyone money, they are buying Tbills up and snacking on it like breakfast.

So I am wondering how a select few in Nairaland or a select few of Nigerians that choose to invest will create more devaluation for the naira, when the way the country is run does that exactly.

The funny part about this argument is if we begin to ask people what they think of this current Administration, many wouldn't have any good thing to say. I am now wondering why people have decided to be optimistic about whatever said government says about the economy you are complaining about. It's surprising and it's also not. My conclusion is bias, because of the low risk easy money. Many can't phantom a world without Tbills, a world without a low risk investment. A world with only high risk stocks is a no-no for them. That's my opinion.

You assume we don't support the naira and state we are low risk takers, where in actuality, some of us have actually boosted the value of the naira by taking risks, sending in forex to be invested in tb ..

How is that a low risk investment?

Now if it was the opposite and everyone became speculative and started hoarding dollars, what do you think will happen?

You say a lot but most of what you say is full of what ifs and lacks basic common sense .


I say this because of how you couldn't even grasp something as simple as how monetary policies work.

Freedem:



You assume we don't support the naira and state we are low risk takers, where in actuality, some of us have actually boosted the value of the naira by taking risks, sending in forex to be invested in tb ..

How is that a low risk investment?

Now if it was the opposite and everyone became speculative and started hoarding dollars, what do you think will happen?

You say a lot but most of what you say is full of what ifs and lacks basic common sense .


I say this because of how you couldn't even grasp something as simple as how monetary policies work.

Lol, you stated what Monetary Policies should do...

I told you that what monetary policies were intended to do is not working and has never worked especially for our naira. The historical charts is proof. How does that mean I don't understand Monetary policies? You should remove the bias from your eyes and see what I wrote properly.


Who said People don't send Forex home to invest in Tbills? The question is how many do that? How many Nigerians support businesses that bring in more Forex? Your point on Nigerias going abroad and sending forex back home to be invested as Tbills is funny. I mean, is that not optimism? Do you have the data on Nigerians doing that? But there is data on how many Export businesses there is. What is more sustainable and can actually work? That or businesses that bring in forex? Lol! Clearly a lot of bias.

Your argument is what Lacks basic common sense as you have not answered my question about how a few investors hedging will affect FX? How many Nigerians even do something as basic as Fixed Deposits? Talk less of Tbills? Lol! And how many Nigerians will then hedge?

The narrative has always been for the select few who actually invest and want to hedge. Not for the whole Nigeria to buy FX, if they do, that's their business, but we both know that's not possible because of the mindset of many Nigerians.

Continue with your bias, time will tell how things pan out. Your comments and mine will be here waiting for us and everyone to be revisited.

Freedem:



You assume we don't support the naira and state we are low risk takers, where in actuality, some of us have actually boosted the value of the naira by taking risks, sending in forex to be invested in tb ..

How is that a low risk investment?

Now if it was the opposite and everyone became speculative and started hoarding dollars, what do you think will happen?

You say a lot but most of what you say is full of what ifs and lacks basic common sense .


I say this because of how you couldn't even grasp something as simple as how monetary policies work.

Why can't u just make ur point without disrespecting someone......

If he insults u back now, the matter will change, just make ur point for or against an opinion .shikena

zamirikpo:


Why can't u just make ur point without disrespecting someone......

If he insults u back now, the matter will change, just make ur point for or against an opinion .shikena

It was not an insult, but if it comes across as that, apologies.

My frustration with him is based on his irrational fear of naira devaluation.

GonFreecss1:


Nope. You have it the other way round. The more it is devalued the more people would hedge.

I am beginning to think you guys I trying to heap optimism on an outcome you all know optimism can't help.

If the naira is stable people won't have a need to hedge, no one would even be thinking about it.

I will say this and I will say it again, how many of you low risk takers support Nigerian businesses? Buy stocks? Specifically businesses that will go on to export goods and services that earn forex that would ultimately increase supply of said forex? Because that is the only way. If supply is greater than demand. The truth is, many of you are fine with the Tbills low risk, which is okay, many more are fine with fixed deposits and many many more are fine with leaving their money in their bank accounts, and the banks? They are not lending anyone money, they are buying Tbills up and snacking on it like breakfast.

So I am wondering how a select few in Nairaland or a select few of Nigerians that choose to invest will create more devaluation for the naira, when the way the country is run does that exactly.

The funny part about this argument is if we begin to ask people what they think of this current Administration, many wouldn't have any good thing to say. I am now wondering why people have decided to be optimistic about whatever said government says about the economy you are complaining about. It's surprising and it's also not. My conclusion is bias, because of the low risk easy money. Many can't phantom a world without Tbills, a world without a low risk investment. A world with only high risk stocks is a no-no for them. That's my opinion.

Everybody can't be the same, same applies in the world of investment. A lot have been said on this divergent views already, and it just requires that people respect each other's opinions. This is where maturity comes in. This forum has been derailed by many porporting to false their approach to investment on others. It doesn't work that way. Some people just can't eat beans like that but will manage akara or moimoi. That is how God created us. Some people can't do business and succeed but they can help those in it and earn a living. Bottom line - they all make money. So let's respect this space of diversity in us and this forum will be helpful for those looking for easy and safest ways to make money. How I wish this forum has a more stringent rules and ways of enforcement then it becomes lively for young and old, mature as well as those coming up.

Please let's make this forum mature by learning to accept each other's opinion on his/her approach to making money.

hias2012:


Everybody can't be the same, same applies in the world of investment. A lot have been said on this divergent views already, and it just requires that people respect each other's opinions. This is where maturity comes in. This forum has been derailed by many porporting to false their approach to investment on others. It doesn't work that way. Some people just can't eat beans like that but will manage akara or moimoi. That is how God created us. Some people can't do business and succeed but they can help those in it and earn a living. Bottom line - they all make money. So let's respect this space of diversity in us and this forum will be helpful for those looking for easy and safest ways to make money. How I wish this forum has a more stringent rules and ways of enforcement then it becomes lively for young and old, mature as well as those coming up.

Please let's make this forum mature by learning to accept each other's opinion on his/her approach to making money.

True. Everyone has their own strategy. I apologize if my opinion made anyone uncomfortable, my opinion is what it is, an opinion.

It is well.

Freedem:



It was not an insult, but if it comes across as that, apologies.

My frustration with him is based on his irrational fear of naira devaluation.

I also apologize for frustrating you with my opinion, though I need to point out it's not out of fear for naira devaluation. I am a small exporter to an extent basically pushing what my power carries, so my only fear is business not doing good, not naira devaluation. Can I also point out I am invested in Treasury bills too? I have my hands in Federal government bonds and some corporate and state bonds? Nigerian Stocks?

I never said people should run away from naira. I just said people should hedge, I also advised people to try and earn in forex, because I believe all this will help the economy and people in return, but like the other guy pointed out, my opinion is not a popular one, but at least it's just an opinion. I hope we are cool? Because I am definitely cool with you and everyone no matter their opinion.