nwolisar:


I was amazed at their secondary rates too as at last week, however funds were not liquid then, else I would have locked in.
Is it likely for rates to gain for this Wednesday's auction?

DaBogu:
Stop hating on ositadima1 here, he aint the reason you're broke or NBT rates falling.

Use that energy to double your hustle

holyprime:



well I understand your logic, that is why they say all fingers are not equal...

going by this your logic, that your friend is also a learner, because there are other persons worth many billions of dollars...lol

Deknight45:
Frequently Asked Questions (FAQs) on Commercial Papers


What are Commercial Papers?

Commercial Papers (“CPs”) are unsecured short-term debt instruments issued by corporates to get funds from the public (private individuals, institutional investors, non-governmental organisations, religious bodies etc.) to meet short-term debt obligations such as working capital needs.



How do Commercial Papers work?

CPs are similar to Treasury bills (“T-Bills”) because they are issued at discount rates, which may be paid upfront or capitalized.

For instance, an investor could choose to receive N1m in the future (maturity amount/face value), which would require an ‘upfront’ investment below that face value (for instance N980,000 for a 90-day instrument at 8.0%), or could choose to invest N1m today to receive a ‘capitalized’ return above the investment amount (for instance N1.02m for a 90-day instrument at 8.0%).



What is a True Yield?

The ‘true yield’ is the effective return on investment (ROI). Using a simplified example, if an investor wants to receive N100,000 after a one-year period (365-days) and chooses to invest in a discounted instrument which is offered at a rate of 10%, the investor will pay a discounted value of N90,000 to receive N100,000 at maturity.



The true yield on that investment is not 10.0%. It is in fact 11.1%, calculated as return received as against the initial investment (N10,000/N90,000). This represents the return to the investor if the instrument is held to maturity.



The discount rate is used to calculate the present value of an investment, which differs from the yield on an investment.



Primary and Secondary Market for Commercial Papers

A CP can be purchased either in a primary or secondary market. The primary market is where investors buy financial instruments at issuance, while in the secondary market, investors trade (i.e. buy and sell) instruments purchased at primary market issuances.



The minimum purchase amount in the primary market may vary depending on the issue size. However, the minimum limit is typically set at N5m, while in the secondary market there are no standard lot sizes, but a minimum of N100m should be prepared for any purchase.



The major limitation for the secondary market trading of commercial papers is the illiquidity within the market, given that purchasers of these instruments typically only sell instruments in large volume sizes. Consequently, purchasing CPs is easier in the primary market.



What is the Tenor?

CPs are issued for time periods which match the issuer’s needs, with minimum and maximum tenors of 15 days and 270 days respectively.



What is a Commercial Paper Auction?

In the primary market, the issuer through an Issuing House sells to the market, through a fixed price subscription. Here, market participants signal interest in the issue and commit to purchasing volume sizes over an ‘offer period’ – which typically lasts only a few days.



This process is so because the rate on the issuance is fixed prior to offer to the market. This is unlike the T-Bills primary market issuances which are held in an auction format and investors are allowed to state the yields at which they would be willing to invest.



What do I Benefit from Investing in Commercial Papers?

While CPs in Nigeria are typically issued by blue-chip corporates with impressive track records of financial performance, this does not eliminate credit risk.



The discount rate on the CP is usually reflective of the credit rating of the issuer, which may be gleaned from the magnitude of the difference between the discount rate on a T-Bill with similar maturity and the CP being issued.



Consequently, CPs offer investors the opportunity to purchase better yielding instruments than available on risk-free instruments, if they are willing to take the calculated risk.



How are Commercial Papers different from Treasury Bills?

CPs have similar characteristics to T-Bills, relating to the mode of pricing. However, that is where the similarities end. T-Bills are usually issued by the government through the CBN at auctions which are typically held fortnightly, for fixed tenors of 91-days, 182-days, and 364-days.



Also, the minimum volume to participate in the T-Bills primary market auctions is N50,001,000.0, while secondary markets are very active and flexible relative to lot sizes.



Can I sell before Maturity?

Yes, you can sell CPs before maturity. A major constraint of selling CPs, however, is illiquidity and size of the minimum tradeable volume. Also, the price at which you sell depends on the prevailing interest rate at the time.



Can I rollover my CP Investment?

Usually, the answer is no. This is because a CP issuance is not a periodic auction which provides certainty of another CP investment opportunity. This, however, does not rule out the possibility of a CP investment opportunity at maturity. Nevertheless, when a CP investment matures, it can be rolled over into another money market or fixed income investment such as T-Bills and Bonds.



What are the Other Benefits of Commercial Paper?

Interest earned is tax-exempt
Since certificates are issued for CP investments, they can be used as collateral or as evidence of investment for visa application.


How Can I Buy Commercial Papers?

To purchase Commercial Papers, you can contact your account officer or send an email to brokerageteam@afrinvest.com

Lagos: Adedoyin: +234 809 778 3100

Port Harcourt: Taiwo: +234 808 718 4771

Abuja: Bola: +234 909 504 1827

PearlStreet:


Donate your advice to your broke, gambling boyfriend.

ositadima1:


In your mind you think you made sense, a typical example of dunning–kruger effect, "a cognitive bias in which people mistakenly assess their cognitive ability as greater than it is. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability".

Cary on brother !

Akerewe:
Good morning great investors,
Pls what are d stop rates for secondary market in stanbic & gt bank today

Mavin1:


Have been trying to email you, how can I reach you Sir?

Bamz:
This is a bit of a distraction, but I reckon that the interest from t-bills can be further invested in cryptos.

I was reading an article from Cointelegraph that the currency has been profitable for 98.2% of the days since creation. According to the report, "That leaves 69 unprofitable days — which include virtually all days during December 2017, at the apex of bitcoin’s historic bull run to $20,000 — as well as almost all of January 2018."

Since we're all short to mid-term investors, this can give us a bit of perspective:

52 Week High / Low $13,796.49 USD / $3,191.30 USD ( over 400%)

90 Day High / Low $13,796.49 USD / $4,836.79 USD (over 280%)

30 Day High / Low $13,796.49 USD / $7,564.49 USD (over 80%)

-----
A logic one can adopt is to ride the waves not minding where the water takes you. If you do Dollar Cost Averaging and buy say $100 at every thousand dollars to Bitcoin rate, I think that makes a lot of sense in the long term.

E.g if you start when bitcoin is at $10k, you buy $100, and even if it drops to $9k (better for you), you still accumulate at fixed amounts of $100 at $8k, $7k etc until it gets to a plateau. When it starts to retrace, depending on your financial goals, you either wait for it to get to $11k and liquidate all the previous investments or if you're a long term investor, keep buying at those milestones, and liquidate at an all-time high (ATH) price which will be over $20k. The only thing is that no one knows when the ATH price will occur.

I wonder why I've been saving in Naira.

ositadima1:


This is so true, my doubt is liquidity, how easily can i offload my coins. Yesterday morning, bitcoin dropped just below 10,000 usd and as at this morning it is around 11,490 usd, a 14% gain in a day. Imagine if I had entered the market at its low and exited today with a seed money of 2 million naira, I would have made 240 k profit.

Again, if I can assure my self of its liquidity I might start trading it. Even if it crashes, no problem, the worst case that can possibly happen is having my money tied down for a while, it always bounces back given time.

Cryptocurrency is here to stay, I even read some where it will eventually be worth 100,000 usd a coin in a couple of years as there are only a limited number of bitcoins ever.

jayjay1512:
Please how safe and secure is this I invest app for TB ,it has a sterling bank account attached to it

PearlStreet:


Donate your advice to your broke, gambling boyfriend.

Barrytone:
Crypt: someone said the coin is scarce that's why price is up and I ask, who mint the coins. Who regulates it. Who tells him to stop printing. A day will come like mmm when everybody will have crypt and there will be no buyer. What will happen? When can I buy with those coins in Alaba or ladipo. Can I buy cement with it.
Am a novice and will like us to clear some grey area here to educate novices like me. I reiterate, I don't like too much money. One thing at a time, crypto to the left, we are tbillers.

Barrytone:
Crypt: someone said the coin is scarce that's why price is up and I ask, who mint the coins. Who regulates it. Who tells him to stop printing. A day will come like mmm when everybody will have crypt and there will be no buyer. What will happen? When can I buy with those coins in Alaba or ladipo. Can I buy cement with it.
Am a novice and will like us to clear some grey area here to educate novices like me. I reiterate, I don't like too much money. One thing at a time, crypto to the left, we are tbillers.

NIKEDEEDS:


Sure, you can...

First option: Download your the sterling bank invest app, fund your wallet and you are good to go.

OR

Second option: visit any sterling bank branch, tell the customer care officer that you want to do treasury bills and they will assist you.

I know that you can invest as low as 100k (for sterling bank).
Some banks (e.g Zenith bank) insist that you must have 1M to do treasury bills.

Bamz:


Lol for you to be investing in TBills and making this kind of comments befuddles me. You sought information, and it got you here. I respect your opinion but I'm cringing right now.

I agree that we have different levels of risk appetite.

If I had a million dollars today, its ratio 70:30 between MMIs and cryptos, but thats me. Some may throw in equity investments, real estate etc. I'm team tbills too but then inflation rates are always at par with the interest but I understand that preservation of capital is most paramount.

Does it make sense to bash what you do not understand? No. Then seek knowledge and information.

Does it make sense to invest in what you do not understand? No, stick to what you know.

Barrytone:
At the end, my worries just got complex, what stops the guy that generated the first coin from generating another one when he feels he needs more. Why dont we think he withdraws and introduce at will to influence price. And what is telling us that he doesn't have proxy that holds 50% to himself. On stores in atlanta accepting it, what concerns me, i have never bought from atlanta. I mention were i can access. Why should I trade in a currency that is not qualify as money(generally accepted). I once had a zimbabwe dollar while in school, that dollar died naturally in my wallet. The only thing it fetch me was confuse fellow students that i have dollar to exchange by monday as I don't patronize aboki. Age wouldn't let me try that now.

Itziykelly:

pls how much percent interest will 100k investment yiel?

Itziykelly:

pls how much percent interest will 100k investment yiel?