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Treasury Bills In Nigeria - Investment (10) - Nairaland

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Re: Treasury Bills In Nigeria by feelamong(m): 11:06am On Aug 09, 2012
For those of us who have been watching the Money market, You would have seen the absolute 'Carnage' in the market recently.

The Interbank rate went as much as 37% yesterday due to the paucity of liquidity after Sanusi increased the CRR for commercial banks to 12%.

The implications for the Tbills auction was well felt yesterday. Rates went up immediately and this is good for investors that have cash at the moment!!!
Re: Treasury Bills In Nigeria by feelamong(m): 11:08am On Aug 09, 2012
The CBN stop rates for the Tbills auction yeaterday were as follows:

91 DAYS ------14.5%

182 DAYS ------15.30%

364 DAYS ------15.38%

Good one for investors!!! cool

1 Like

Re: Treasury Bills In Nigeria by webstradamus: 2:36pm On Aug 09, 2012
feelamong: The CBN stop rates for the Tbills auction yeaterday were as follows:

91 DAYS ------14.5%

182 DAYS ------15.30%

364 DAYS ------15.38%

Good one for investors!!! cool
Re: Treasury Bills In Nigeria by Seun(m): 3:26pm On Aug 09, 2012
webstradamus:

Damn!!! Really didn't see this coming. Lost by 0.06% two weeks ago and due to fear of losing again, I ended up bidding way too low (14.75%) angry
Regardless of what you bid, every winning bidder should get the same rate at the end of the auction. Am I wrong about this?
Re: Treasury Bills In Nigeria by feelamong(m): 4:51pm On Aug 09, 2012
Seun:
Regardless of what you bid, every winning bidder should get the same rate at the end of the auction. Am I wrong about this?

Clearly you are wrong on this! You will only be availed at the rate you bidded for! Pronto!!

2 Likes 1 Share

Re: Treasury Bills In Nigeria by feelamong(m): 4:52pm On Aug 09, 2012
http://af.reuters.com/article/nigeriaNews/idAFL6E8J9BDZ20120809

LAGOS Aug 9 (Reuters) - Nigeria sold 172.1 billion naira ($1.1 billion) in treasury bills, more than expected, and increased the yield it offered on the short-dated paper to mop up liquidity to support the currency, the central bank said on Thursday.

The bank said last week it would auction 142.1 billion naira of treasury bills with maturities of between three months and one year. It gave no reason for the additional 30 billion naira of issuance.

The naira surged 1.1 percent to a more than two-week high on the interbank market on Thursday following the sale and after state-owned energy company NNPC sold $450 million to banks in exchange for the local currency.

The central bank said it had sold 50 billion naira of 182-day Treasury bills at a yield of 15.30 percent, higher than 14.94 percent at its previous auction last month.

It sold 90 billion naira of 364-day bills at a yield of 15.38 percent, compared with 15.60 percent a month ago, and 32.06 billion naira of 91-day bills at a yield of 14.5 percent, higher than 13.94 percent at the last such auction a month ago.

Nigeria issues treasury bills twice monthly to reduce the money supply, curb inflation and help lenders manage their liquidity.

Overnight lending rates spiked on Wednesday to more-than two-year high of 35 percent, partly because of the treasury bill sale and a foreign exchange auction of $318 million which soaked up naira liquidity.

The bank two weeks ago left its benchmark interest rate on hold at 12 percent but raised the cash ratio for lenders to 12 percent from 8 percent, to tighten liquidity.

Total subscriptions for the bills were 422.82 billion naira. ($1 = 160.05 naira) (Reporting by Oludare Mayowa; Editing by Chijioke Ohuocha and Catherine Evans)
Re: Treasury Bills In Nigeria by webstradamus: 7:22pm On Aug 09, 2012
feelamong:

Clearly you are wrong on this! You will only be availed at the rate you bidded for! Pronto!!

1 Like

Re: Treasury Bills In Nigeria by feelamong(m): 8:24am On Aug 10, 2012
webstradamus:

Well said! Unfortunately, you only get what you bid provided it doesn't exceed the yield rate. And that's what makes bidding kinda difficult. Imagine me bidding 15% last week and then 14.94% ended up being the stop rate. I got scared this time and bid 14.75% only for it to yield 15.30%. Am so mad at myself now angry

This is the beauty of the game!

I enjoy the fact that there is some element of 'gambling' in bidding for Tbills. But what i do most times is to speak to about 3 -4 fund managers/Dealers in discount houses and Bank Treasury to seek their opinion. Moreover one has to do some sort of research as per what the Interbank rates are doing and how tight is the liquidity in the market before any Tbills auction.

But; in all you might never get the exact Stop Rates! but all times you will get a rate far better than any Fixed deposit!

1 Like 1 Share

Re: Treasury Bills In Nigeria by FunmyKemmy(f): 12:29pm On Aug 16, 2012
Interesting.
Re: Treasury Bills In Nigeria by feelamong(m): 1:35pm On Aug 16, 2012
http://www.channelstv.com/home/2012/08/15/cbn-to-issue-n71billion-treasury-bills/

CBN to issue N71billion Treasury bills


The Central Bank of Nigeria (CBN) has announced plans to issue N70.65 billion ($445.18 million) in treasury bills ranging from 3-month to 6-month maturities.

The apex bank made the announcement on Wednesday, stating that the treasury bills will be issued at its regular bi-monthly debt auction next week, as part of measures to tighten liquidity.

The bank said it will issue N30.65 billion in 91-day bills and N40 billion in 182-day bills on August 23.

On behalf of the federal government, the CBN issues treasury bills regularly to reduce money supply, curb inflation and help lenders manage their liquidity.
Re: Treasury Bills In Nigeria by coolguyz(m): 9:29am On Aug 17, 2012
you guys are doing a good job, will help feelamong with regards to updates and tips in making decision on TBills from our in-house resource
Re: Treasury Bills In Nigeria by coolguyz(m): 9:31am On Aug 17, 2012
There will be primary auction for Treasury Bills on Wednesday, 22-August-12 with details as follows;

91 days tenor with maturity of 22-Nov-12, amount on offer is N30.647 billion
182 days tenor with maturity date of 21-Feb-13, amount on offer is N40.00 billion


The 91-day and 182-day bills are trading in the secondary market at 14.40% (offer) and 15.25%(offer) respectively.

Yields had gone up across all maturities in the past week due to a drop in the level of liquidity and an increment in the sales of bills by counterparties who need to raise funds to meet their obligations. However, there was a marginal drop over the past two days as there was a decrease in demand for bills. There is also the expectation of the FAAC inflow after the holidays. It is expected that yields at this auction might hover around the stop rates of the previous one
Re: Treasury Bills In Nigeria by coolguyz(m): 9:36am On Aug 17, 2012
expectation ranges as follows -

91 days: 14.00% - 14.65%
182 days: 14.95% - 15.55%

**please note these are expectations based on the market reading and not CBN stop rates!
Re: Treasury Bills In Nigeria by feelamong(m): 10:37am On Aug 17, 2012
coolguyz: expectation ranges as follows -

91 days: 14.00% - 14.65%
182 days: 14.95% - 15.55%

**please note these are expectations based on the market reading and not CBN stop rates!

Thanks a lot my Chairman. Pls I need ur email. We need to share a few tips on the market.

I usually do the 91 days and after talking to my brokers most of them are looking at 14.25% for that. I will stick your lower limit of 14% .
Re: Treasury Bills In Nigeria by webstradamus: 4:00pm On Aug 17, 2012
coolguyz: There will be primary auction for Treasury Bills on Wednesday, 22-August-12 with details as follows;

91 days tenor with maturity of 22-Nov-12, amount on offer is N30.647 billion
182 days tenor with maturity date of 21-Feb-13, amount on offer is N40.00 billion


The 91-day and 182-day bills are trading in the secondary market at 14.40% (offer) and 15.25%(offer) respectively.

Yields had gone up across all maturities in the past week due to a drop in the level of liquidity and an increment in the sales of bills by counterparties who need to raise funds to meet their obligations. However, there was a marginal drop over the past two days as there was a decrease in demand for bills. There is also the expectation of the FAAC inflow after the holidays. It is expected that yields at this auction might hover around the stop rates of the previous one
Re: Treasury Bills In Nigeria by feelamong(m): 4:31pm On Aug 17, 2012
webstradamus:

How does this secondary market work and how can one participate?

Tried playing in this secondary market a couple of times but never enjoyed it. You need loads of cash to actuallplay well here otherwise the big banks will just fry u.

The idea is to buy high and sell low.
Re: Treasury Bills In Nigeria by coolguyz(m): 12:38pm On Aug 22, 2012
webstradamus:

How does this secondary market work and how can one participate?

in addition to @feelamong's statement, note that you can also buy treasury bills on the secondary market. You need not wait for primary auctions or OMO auctions to invest in treasury bills. The secondary market is like you buying an already issued maturity which is being traded. Registered Primary Market Dealers (banks and discount houses) atimes sell from their existing portfolio to investors and can take instructions to buy specific maturities from the market on your behalf.

Will be willing to answer further enquiries

@feelamong. . . will send you my details. keep up the good work!
Re: Treasury Bills In Nigeria by feelamong(m): 1:31pm On Aug 22, 2012
coolguyz:

in addition to @feelamong's statement, note that you can also buy treasury bills on the secondary market. You need not wait for primary auctions or OMO auctions to invest in treasury bills. The secondary market is like you buying an already issued maturity which is being traded. Registered Primary Market Dealers (banks and discount houses) atimes sell from their existing portfolio to investors and can take instructions to buy specific maturities from the market on your behalf.

Will be willing to answer further enquiries

@feelamong. . . will send you my details. keep up the good work!


A lot of people have been sending mails to me on Tbills asking for where they could actually invest as low as N100K - N500K. Can You advise on any Discount House that accepts as low as that. My bankers do not accept below N1Million.
Re: Treasury Bills In Nigeria by coolguyz(m): 5:34pm On Aug 22, 2012
feelamong:

A lot of people have been sending mails to me on Tbills asking for where they could actually invest as low as N100K - N500K. Can You advise on any Discount House that accepts as low as that. My bankers do not accept below N1Million.


It would be rare to get any to do that unless you have an account with them which means you would have met their minimum opening investment balances which would always be in Millions. Safe to say the paper work and charge (ranging between 0.5%pa - 0.75%pa) does not make the PMD to accept low amounts.

However, there are mutual funds dealing solely in government securities (havent done any analysis on them yet) like "bond fund" bla bla which may be another option though you cant expect as high returns as investing directly.

2 Likes

Re: Treasury Bills In Nigeria by feelamong(m): 8:57am On Aug 23, 2012
CBN STOP RATES!!

91Days ------14%

182 days ------15.08%

Rates dropped but still not bad!
Re: Treasury Bills In Nigeria by DadaStephen1(m): 12:54pm On Aug 23, 2012
feelamong:

Officially you can invest as little as N1000. But because of the paper work involved and for the fact that the fees u pay to them is very low, most banks and discount houses insist on a min of 100k to N1M.

If you are interested send me a mail to feelamong@gmail.com ..I will introduce you to a friend in a discount house.

Chiarman abeg,
I've got interest in this Tbills stuff, but u guys should pls help novices like me.
Make it simple:
What r Tbills? How much is d minimum to maximum investment rate and what is the profit or interest like?
Wher can I get it?
Thanks

1 Like

Re: Treasury Bills In Nigeria by feelamong(m): 1:04pm On Aug 23, 2012
Dada-Stephen:


Chiarman abeg,
I've got interest in this Tbills stuff, but u guys should pls help novices like me.
Make it simple:
What r Tbills? How much is d minimum to maximum investment rate and what is the profit or interest like?
Wher can I get it?
Thanks

Broda...just take ur time and read thru the thread..wont be nice sounding like a broken record to others who have been following the thread.

In summary Tbills are discounted Debt Instruments issued by the CBN by the order of FGN. It means you are borrowing money to the FGN at an interest rate (Discount Rate). The good thing here is that you can actually collect your interest upfront and it is Risk Free and Tax free. Moreover you actually get far higher rates that you will ordinarily get from your investments in Fixed deposits.

The minimum amount where i invest is N1M. Just talk to your bankers. If they cannot help then you can give me a shout to introduce you to my account officer.

Shalom!!

1 Like 1 Share

Re: Treasury Bills In Nigeria by Americasman(m): 10:34pm On Aug 23, 2012
feelamong: CBN STOP RATES!!

91Days ------14%

182 days ------15.08%

Rates dropped but still not bad!

The rate I got from first bank is 12.02% 91days. I wonder why? Please poster, How can I get a good rates. These banks keeps giving me very bad rates. Do you think the rates re from the secondary market?
Re: Treasury Bills In Nigeria by Ojix85: 7:12am On Aug 24, 2012
Hi guys.

This will be my second time i will be trying to invest in Treasury Bills and GTBank keeps messing me up.

I called them yesterday when i noticed that my account has not been debited. The investment peeps said that will be done either yesterday or today, but i really doubt.

I have no choice but to pull my funds from this silly bank.
Re: Treasury Bills In Nigeria by Ojix85: 7:22am On Aug 24, 2012
feelamong:

Broda...just take ur time and read thru the thread..wont be nice sounding like a broken record to others who have been following the thread.

In summary Tbills are discounted Debt Instruments issued by the CBN by the order of FGN. It means you are borrowing money to the FGN at an interest rate (Discount Rate). The good thing here is that you can actually collect your interest upfront and it is Risk Free and Tax free. Moreover you actually get far higher rates that you will ordinarily get from your investments in Fixed deposits.

The minimum amount where i invest is N1M. Just talk to your bankers. If they cannot help then you can give me a shout to introduce you to my account officer.

Shalom!!

@Feelamong:

Pls introduce me to your account manager. Need some help here.
Re: Treasury Bills In Nigeria by feelamong(m): 7:25am On Aug 24, 2012
Americas_man:

The rate I got from first bank is 12.02% 91days. I wonder why? Please poster, How can I get a good rates. These banks keeps giving me very bad rates. Do you think the rates re from the secondary market?

I believe they must have quoted a Secondary market rate to you. Tell them you want to bid in the Primary market auction!
Re: Treasury Bills In Nigeria by feelamong(m): 7:31am On Aug 24, 2012
Ojix85:

@Feelamong:

Pls introduce me to your account manager. Need some help here.

send ur email address to me or send me a mail on feelamong@gmail.com
Re: Treasury Bills In Nigeria by feelamong(m): 7:35am On Aug 24, 2012
Ojix85: Hi guys.

This will be my second time i will be trying to invest in Treasury Bills and GTBank keeps messing me up.

I called them yesterday when i noticed that my account has not been debited. The investment peeps said that will be done either yesterday or today, but i really doubt.

I have no choice but to pull my funds from this silly bank.

Well, I think you should wait and see. Usually my account is debited on Fridays. but then i hope you did not bid above the CBN stop Rates!

1 Like 1 Share

Re: Treasury Bills In Nigeria by Ojix85: 8:00am On Aug 24, 2012
feelamong:

Well, I think you should wait and see. Usually my account is debited on Fridays. but then i hope you did not bid above the CBN stop Rates!

Well, i hit the stop rate of 14% sharp, for 91days... Thanks a lot for the encouragement.

1 Like 2 Shares

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