₦airaland Forum

ogoo4real:
Please someone who knows the implications of the MPR @27% should through more light. Thanks 🙏

Emmasoft answered you correctly but here is another explanation.

MPR is like a water tap that CBN and a body of commitee meet and discuss/vote on how to set the flow frequency of money supply (water supply) from that tap.


Increase of MPR means Increase on the returns on the investments like Tbills and your MMF rates.

Decrease of MPR means, rate will fall across board which is why you have been hearing people complaining of MMF rate falling from 20% to now 16%

But this time, CBN didn't cut mpr, meaning they didn't regulate the tap supply, what they only did was to regulate only how banks handles money supply, terms like (Cash reserve ratio, assymetric corridor etc)


Everything I just wrote in one sentence means, Your MMF rate might stay at the current rate for now or slightly improve. Till next year February when they decide again.

For more breakdown about other financial terms, go to my YouTube @PennywiseMC or (Pennywise Money Conversation)

emmatony:
Please, I would like to seek some advice. I own a twin two-bedroom flat. After calculating the potential returns from selling the house and investing the money in a money market fund (MMF), I realized it would yield much better returns than the rent I currently receive. Do you think it’s advisable to sell the house and invest the money instead, so I can have peace of mind and avoid tenant issues?

Chief, let me break it down, and after I finish, if you don't understand. Ask question, let me clarify.



In real estate, house built on the land isn't the investment, the investment is the land itself. House built on it (rent) is just for passive income. You will only cash out the real value of the land appreciation after you sold off the property.

Most people don't get to recoup money used in buying land and building house on it just from rent, however, they can recoup quickly when they sell outright.

What you have in your possession is an ASSET that will bulletproof you even if Nigeria financial system collapses.

We investing in mutual funds and not having landed property is very risky because the day Nigeria Government begin to default on loans like Tbills, Bonds, OMO and Eurobond.


The panic will cause people to start withdrawing their investment and if that happens, Banks will prevent it by not paying because they can't pay everyone at once and Government needs liquidity because they wouldn't want to print more money, it will worsen inflation.

Stock market will collapse overnight.

So they (the government) will seize our MMF money, Seize, Tbills money and default on other loans. (Even the U.S seized it's citizen gold when it came to times like this during the great depression.)

The only people that will be saved will be long term bonds holders and OMO holders, why?

Because Government already took their money, they will only refinance it.


By then, we the MMF or Tbills investors prayer point will be, "oh Lord, let Nigeria economy stabilizes so we get our capital back without interest" lol

Actually, that was what happened in Greece before EU bailed it out.

Now, let's bring it home.

You sir, are a lucky man because when government seize our investment money, they can't come to seize your land.

By then you can sell your land using btc or USDT as transaction currency because Naira will be useless by then.

When you sell your land, you will Japa, it is then you will now understand the value of land property.


If you like my explanation, follow me on my YouTube channel where I break down finance and money related matters.

enemerci:
Good house.

Interest rate is really going down hence my question. For someone who has the mmf and want to take it a step further by adding another portfolio to the existing mmf. A per folio with a medium risk but will most likely yield over 20% annually. What will you recommend.

My oldies please come and share your wealth of experience.

I would recommend Mutual fund with stocks. There are a few of them on cowrywise. They carry a bit of risk but stocks is where people are circulating money to now.

So when you buy Stocks mutual funds, you essentially buying something like Nigeria Index/ETF. I would recommend the Afrinvest Equity fund on cowrywise.

Be warned, it's risky, but if you have the patience and appetite for risk. Go for it.

If you are older than 40 Years, remain here with us so we keep tracking MMF rates together. Don't attempt to go invest in any risky instrument. Rates are dropping, fine and good, that money you want to go use to buy medium risk instrument, throw it into MMF and have peace of mind, access to liquidity and compound interest.

Government has to do something about this shortage of men.

Fix the economy, create enough jobs to ensure cash flow circulation to enable men get needed funds to date these women.

Very soon, Nigeria will soon be complaining of declining birth rate like South Korea, Japan and Russia.

Vladimir Vladimorich, my man, a real leader, boss, don, prof, CEO.

One of the best president in the world with high ranking approval rating in and out Russia.

Slavia Russii
Glory to Nigeria

Happy birthday Putin

FRANKLYex:
The painful thing for me is my recent discovery that cowrywise high yield investment does not even compound quarterly. I was told it compounds annually. Now with my quarterly compounding template, the rate is almost the same with STANBIC that compound monthly. I no fit cry I beg

You should understand that cowrywise is no different from our OGA EMMASOFT, they are intermediary, they only lead you to the right source to buy MMF. They don't own it.

Whatever cowrywise policy is, is systematically done to get you to always operate their platform and pay them their fee or for them to get referral bonus from the original asset management house.

If you want full disclosure, trade with the original asset management house.

Coolis:
N487.09 daily interest on 990k almost 1 million, is it not too poor? I was expecting at least N500 interest. Please let me know what you guys think because l'm seriously considering changing the MMF operator.








uote author=t33why post=137023140]
It's not a scam app as it is provided by stanbic, you can verify that yourself from the about app. I believe it's the old version based on the last date of update. The 2nd one is the newer version

Where you running to, It's just a matter of time (maybe weeks), they will also reduce rate, you know why? Well, think of it like this, all platforms are trading the same thing "INFLATION" and CBN is the trading house that collects the bet money (your fund),

Now, If you give CBN money through any MMF platform (cowrywise, arm, stanbic) because you see high interest rate, You are betting with CBN that the inflation will continue.

But if inflation slows, stops and begin to reverse, Rate will begin to reduce, CBN will begin to reject that your bet and the new reduce rate will soon affect all MMF platform.



Well now, let me be very clear; that my explanation above is not directly how Monetary policy works economically but I just made up that example to explain to you that low rate affects all platforms.

This is how best I can explain to a 5 years old interested in this topic.

MicKaro:
Omo, shit is getting tough. My monthly interest dropped despite adding some funds to my principal. It seems those days of high interest are gone

You should give God the glory because it means Cardoso is working, CBN is working lol.

Gotocourt:
FMDQ Faces 67% Trading Volume Loss As CBN Shifts To Internal Platform

Guys, what's the implication of this CBN new move

Do not be scared, this doesn't concern you. It was done by CBN for foreign investors to trust our fixed income market. It will officially commence on Dec 1st

Think of it like, instead of CBN trading through an intermidiatry, it is stopping that model and trading directly with you, so now, those intermidiatry you trade through are now loosing patronage.

It's simple. Numbers don't lie.

Your salary is in number. The days in the months is measured in numbers, your qualification to get the job or skill class is measured in number but according to economist, your wants and needs are numerous according to ever changing taste, style, trends and fashion.

Only budget will help you prioritize your real need and when you operate on a budget, guess what? You placing your "needs" to number listing and in this process, it will be evident that resources is always scare compared to your ever craving wants and needs.

That's why money don't last.

If any beginner follow this your suggestion, they will be discouraged to invest in Nigeria.

Your analysis lacks double take fundamentals hence, your knowledge is half baked.

Arizona86:
We are beginning to hear a lot of talks about inflation dropping to 20% lately and how food prices have drastically dropped. I don't know if this is the usual propaganda by the government and are we about to witness a drop in MPR rate which will affect our interest in MMF?

Emmasoft perfectly gave you the right answer, nothing can be further from that truth.

However, CBN isn't looking to cut MPR soon as it is debatable. Some people in the MPC are looking to hold a bit longer till November/December while some want rate cut as soon as this September.

Why is this debatable?


The U.S Fed is looking to cut their own Rate Today Wednesday due to Trump pressure on Powell. If that happens; Investors in the U.S will be seeking to move their money elsewhere, so some faction in the MPC committee suggested that CBN holding MPR rate will attract those FPI hot money.

Keep in mind, FPI hot money is the reason our Naira is gaining strength lately, so more FPI means Naira could even strengthen to 1400.

Rate cut will happen eventually but slowly, so take the advice of Emmasoft to keep investing regardless of seasonal rate change.

emmasoft:
@A305, true. Honestly low rate and low inflation is actually good for us collectively as a country. It strengthens real economy and even though rate may be low you will still have positive real returns once inflation continue to get lower.

Currently at this high rate real returns from fixed income instrument is still negative.

Investors who can take the risk associated with the stock market always end up better rewarded.

absolutely true

And like you always preach, people should keep investing whether the rate is high or low.

Compounding effect is key leverage.

Your message is wisdom to the wise. Keep up the good work sir.

ositadima1:
You did not answer my question. You already pointed out why interest rates was raised but did not include low revenue as one of the reasons. Again, the question is: can taxation reduce or improve the two points you mentioned?

I infact did justice to your earlier question by painting a broader picture.

To outline each:

For point Number 1

When government raises enough tax, it doesn’t need to borrow recklessly. And if it doesn't borrow, No pumping money into the economy, meaning prices of commodities will not raise and in simple answer, No inflation or presence of minimal healthy inflation. So yes. Efficient Taxation reduces inflation. Keyword here is "Efficient Taxation".


For point Number 2.

A healthy vibrant economy don't need
FPI to stabilize FX, rather what the economy needs is FDI to create jobs and multiplier effects in economy hence that in itself will boost the economy, reduce inflation and strengthen the currency.

ositadima1:
You see the highlighted points — you said inflation is keeping rates high, and then at the end you said effective tax implementation will drop rates. That begs the question: are you saying taxes will reduce inflation?

Keep in mind, Interest rate is high and untouched for at least 2 reasons.

1- To reel in Inflation.
2- To keep FPI in the economy to stabilize Naira/dollar FX.


The goal of CBN is to achieve 15% inflation and build a 1 trillion Naira economy. That was the task Tinubu set for Cardoso.

Efficient Taxation will account for revenue that is now generated from part of the money we give FG via T.bill. so, imagine, if they have enough money from Tax, will they need so much of our money anymore? They will need our Tbills money but not as much, so they will be prompted to cut interest rate to only stimulate outflow and inflow of money supply in the economy.

When that happens, Yield for Tbills will be back to single digit numbers.

But and a BIG BUT!

1- Do we trust the Nigeria system to implement the Tax policy flawlessly?

2- Even if the Tax money are being remitted, Will it truly be enough?

3 - What about the status of hot money like FPI that keep fx stable in the absence of FDI?

4 - How does government intend to pay back previous loans without having a deficit?


These questions and more are the reasons why it isn't easy to fix Nigeria hence, the loan circle continues inflation or not. NO FEAR. Even well Taxed economies like Britian have these challenges.

ufotty2001:
I wish I started my family early as a man. I got married at 40yrs this year..

you doing just fine sir. Not how far but how well

If you have gathered enough resources needed to catered to a nuclear family by the age of 40, then the delay was worth it.

One thing about this guy I applaud is he doesn't even talk or crave media attention.

He post pictures of himself and his family and the next time you hear from him again is when he is posting another one next year.

I wrote this on the Treasury bill thread, I figured it also applies here to MMF



CBN is in a dilemma at this point. They want stable FX rate, they want reduced inflation yet they want to reduce borrowing within and plan borrowing externally.

Let me break it down:

Nigeria inflation is sticky and VERY STUBBORN so much so that, eventhough the numbers Quarterly reveals inflation is easing, however Month on Month inflation fluctuates, it keeps rising and in some month falls, then rise again. Very stubborn.

If inflation was only reducing and no fluctuation seen; CBN would have cut rates hence T.bills yield will fallen even lower but CBN is freaking scared.

Here is another problem.

Nigeria is debt free from IMF but owing massive debt internally, Internal debts are easy to repay but it's hardly enough to stimulate the economy because think of it like a ponzi scheme that can NEVER crash.
Now, FG is looking to borrow externally because we can and technically, our debt to GDP ratio is good enough to allow us borrow externally. So FG will prefer foreign debt over internal debt, that was why you heard of the new foreign loan news 2 days ago. They want more of those debt if they need to boost spending. Nigeria spending is too low for our kind of economy.

So, if FG gets more of this foreign loans, they won't rely on internal debt as much to kept running the economy, hence CBN will cut rate, Tbills rate will plummet.

But here is where it gets interesting:

CBN needs FPI which has stabilized Naira/Dollar FX rate to 1500 since last year, and they can only get that when they raise interest rate for internal debt. If they aggressively cut rate, FPI will run away, some will pull their money and begin to buy stocks and Equities, that's why CBN hasn't cut rate since the last 3 or 4 quarters.


CBN’s stance so to keep squeezing inflation, even if the economy growth suffers short-term.

One more last reason to note is:

Global conditions (Trump’s tariffs, Fed cuts) could help Nigeria attract more FDI, which will further strengthen the Naira. That is why CBN is hesitant to cut rate.


How does this affect you, thinking rates are going back up?

Prepare for the wild ride because, you will keep experiencing rates like unstable NEPA light and prepare for the fall of rates once Tax laws are fully implemented next year.

Tinubu and Cardoso are really getting things right on this one.

Generalmerchant:
Thanks for sharing. good the rates are gradually increasing. hope it gets back to 20% soon

CBN is in a dilemma at this point. They want stable FX rate, they want reduced inflation yet they want to reduce borrowing within and plan borrowing externally.

Let me break it down:

Nigeria inflation is sticky and VERY STUBBORN so much so that, eventhough the numbers Quarterly reveals inflation is easing, however Month on Month inflation fluctuates, it keeps rising and in some month falls, then rise again. Very stubborn.

If inflation was only reducing and no fluctuation seen; CBN would have cut rates hence T.bills yield will fallen even lower but CBN is freaking scared.

Here is another problem.

Nigeria is debt free from IMF but owing massive debt internally, Internal debts are easy to repay but it's hardly enough to stimulate the economy because think of it like a ponzi scheme that can NEVER crash.
Now, FG is looking to borrow externally because we can and technically, our debt to GDP ratio is good enough to allow us borrow externally. So FG will prefer foreign debt over internal debt, that was why you heard of the new foreign loan news 2 days ago. They want more of those debt if they need to boost spending. Nigeria spending is too low for our kind of economy.

So, if FG gets more of this foreign loans, they won't rely on internal debt as much to kept running the economy, hence CBN will cut rate, Tbills rate will plummet.

But here is where it gets interesting:

CBN needs FPI which has stabilized Naira/Dollar FX rate to 1500 since last year, and they can only get that when they raise interest rate for internal debt. If they aggressively cut rate, FPI will run away, some will pull their money and begin to buy stocks and Equities, that's why CBN hasn't cut rate since the last 3 or 4 quarters.


CBN’s stance so to keep squeezing inflation, even if the economy growth suffers short-term.

One more last reason to note is:

Global conditions (Trump’s tariffs, Fed cuts) could help Nigeria attract more FPI, which will further strengthen the Naira. That is why CBN is hesitant to cut rate.


How does this affect you, thinking rates are going back up?

Prepare for the wild ride because, you will keep experiencing rates like unstable NEPA light and prepare for the fall of rates once Tax laws are fully implemented next year.

Tinubu and Cardoso are really getting things right on this one.

dollytino4real:
Yes o, my cousin sister traveled to UK last two year with dat money but she is still indebted to the agent. She studied biochem here did her master's here till now no job o, she dey do plenty tins to survive there

while you have an idea about the matter because your know someone who japa'd. Sadly, your opinion is outdated.

A lot has happened since two years ago till today, Since 2 years ago:

*Naira is so much devalued and spending power eroded.

*Nigeria Inflation numbers has been rebased from 2009 to 2014.

*MPR/Interest rate has been high since last quarter of 2024 by CBN.

*Nigeria GDP has been rebased from 250 billion to 350 billion.

*Due to Inflation, Travel expenses 2 years ago has to be considered, hence 20 million of today compared to 2 years ago now has a purchasing power of 15 million.

*Your cousin's present condition/economic reality is the UK is a text book example for this op not to consider this her japa dream.

I digress that 20M still isn't small money by any standard for a Nigerian living in Nigeria, so while I discourage her from emigrating, I will all also suggest she invest that 20M into a safe investment like in Nigeria money market NOT land banking, NOT stocks or Equities but only low yield money market investments.

This will guarantee her financial security, cushion against inflation and steady financial growth, she can worry about physical/environmental security by living in a safe area like a gated estate in Nigeria. Get solar to enjoy regular power. Advance more in her present job seeing that she has all the right qualifications.

What else does she want to japa for?

The grass is not always greener at the other side. But even if it does; time and age will be against her because she has practically lived half of her life here in Nigeria acquiring degrees only for her to pack her bags and go restart life again on another man's land just to earn the same 20 million in another 10 years?

Please add a dislike or Thumb down button so people can easily click to vote down disinformation or misinformation. It will fix fake news and wrong information content.

The answer is C due to momentum from acceleration otherwise known as gravitational force from the rolling ball. And this will only happen if the mass of that rolling ball is greater than the mass of that stationary ball on the other side of the swing.

The energy in the speed of the rolling ball has to go somewhere, hence, centrifugal force will make it bounce back and the stationary ball might change direction to join it to press down the swing to kill that unfortunate fellow.

yok:
Simple reply is that NIGERIA APPs for trading global stocks are small firms with poor Customer service. It would have been better for all of them to come together as one entity.

Chaka used to be top of the pack before, due to the pedigree of the main founder; but now a shadow of itself. Also, the fact that others charge commission that has a minimum ranging from a minimum of $1 per trade or rate of 1.5% per trades makes them not attractive at all. Chaka had no minimum commission, but a flat rate commission of 1% (mainly, if you meet the simple conditions of transacting up to a minimum level, which is very low and reasonable).

Problem is that Chaka's platform went off for like 2 weeks and they are just about to resolve it, And if they abide by their words, we should start having access to our accounts and start trading tommorrow.

For now let us just leave the story like this. The matter did not escalate much, as for those who have bought share via the platform (our shares finally resides in the system of either CSCS or equivalent organisation for US stocks), so our shares purchased are safe.

Also behind the scene the main Stockbrokers Driveweallth (also main Stockbroker for the likes of Trove, Bamboo etc), may have intervened (they were in the picture and probably advice Chaka to do things correctly), this may the the reason the Platform was kept in some maybe 20% working condition for this week, but still not able to execute trades.

I hope this clarify what you want. All the local APPs have zero Customer service and charges high Commission (high Commission is understandable, due to cost of doing business in Nigeria and low Customer base). If quality of service is bad , you will have few Customers, and this advert that people can start trading US stocks with NGN16,000 is not okay, this will only attract Client who will not complain of bad quality service and will even stop trading after losing reasonable part of that NGN16k within one month.

Thanks for your well detailed explanation sir.

Now I have an idea of the situation.

I was worried because I mainly use bamboo to purchase s&p ETFs.

Thanks again.

enque:
Rates from today's auction

Rates are going back up because FPI are slowly leaving the economy.

First, they were pulling money from the capital market and joined the Stocks rally, As at today, Nigeria stocks are showing signs of corrections.

It's FPIs dumping the stocks, CBN don't want their money to leave the economy yet, that's why Tbills is showing signs of upward trend, trying to woo them to stay in the capital market.

yok:
WHAT CHAKA HAS DINE CAN NEVER HAPPEN IN A GLOBAL FIRM OR EVEN IN WELL ESTABLISHED NIGERIA BROKERAGES
It still beats my imagination that a stockbroker can lock out clients from having access to their accounts for over 2 weeks or more!!!

This is one if the reasons when we laugh at people that says they are using the FinTech APPs for Nigeria stocks, it is just not necessary. There is no way these other APP will match the quality of service from the like of MORGAN CAPITAL OR UNITED CAPITA it is impossible!!

Meanwhile we continue fir Chaka to sort ozt their mess.Again I will say probability this matter is not getting escalated as they are just Stockbroker's (but a sub stockbroker, so they had a supervising stockbroker formerly Driveweallth).

So I want to emphasis again, we did not invest in their firm, our investment is in varios stocks and the final regulator or Custodian of our stock is SEC (Securities and Exchange Commission either US, or Nigeria Version CSCS/SEC).

We can see that some firms very unreliable Client service

Just out of curiosity; why are you guys not taking Bamboo seriously here. I have only been seeing chaka.

What's the reason for it?

It's a shame having Ojuelegba at N0 2.

Naah, it isn't worth it at all. Style plus's "Olufunmi" or "run away" is more deserving of that spot even, P,square's "Temptation."

_____

First you have lost your fortune from series of past financial mistakes and you can't afford to make any mistake or take unnecessary risk.

First – Get that 20M, And throw it into a low risk Mutual fund, then use whatever amount interest you get out of it every month-end to run the family, like the investment is running the family needs.


Secondly, Do a feasible study of the business you know how to do best or if you intend to boost this your current business, then go to the bank, take a loan of 5M using your 20Million Mutual fund investment as collateral, YES, banks allows MMF investment for collateral. Use that 5M wisely to kick start the new business or enhance your current busines.


NOTE: Since your wife works, she should compliment whatever you get out of the monthly interest to pay your kids school fees when due.

Now you have Rent to worry about.

Move to a low cost house and borrow externally to cover rent money when due, you can always get back the money from the MMF interest plus your wife support and pay back who lend you the rent money.

So with that 20M used wisely, and your wife support, you are secured, Now if you feel you don't want to take the risk of borrowing 5M loan, using your 20Million MMF as collateral, then close your current business and begin to use your car for Uber, you can still make minimum of 150k - 250k to support your family plus your 20m investment. If you don't have a car, Get an Uber car on rental.

ytdivine:
Hello my fellow investors,
I have been on this MMF for over 8yrs, today, I decided to taste Stanbic Equity Fund since this new App makes easy to navigate to other options.
I paid #10k this morning but what shows on the display is #9,856. It became a surprise to me.

Please, expert in the house, is it how easy it is to lose money here or is there something I didn't do right?
Expecting more insight

Equity investment is a high risk, high reward investment. Disregard the current loss as it's a long term investment. You might wake up next week and that 10k could probably turn 30k.

You should have done your research before investing but It's clear you decided to test the waters with little amount.

Equity investment is you playing a long game; it isn't as low risk as MMF as you are liable to loose your CAPITAL.

isholapeter9:
Please guys I need a good investment plan with a good ROI over a year or more......

You are on a mutual fund thread, so you have your answer being on this thread.

If you don't like it here, look for the Treasury bill thread or Stock market thread here on Nairaland via Google search.

After comparing investments options of all threads aforementioned plus this mutual funds thread, you should be equipped with knowledge to make a decision.

emmasoft:
Inflation rate drops to 21.88% The implication

This is actually not a very good news for the fixed income segment.

Ordinarily, lower inflation figures means governemnt is expected to pay less for borrowing and the way to do this is
to pay less interest in tbills rate, this in turn will reduce the rates MMF offers since the major underlying asset is Tbills

The next MPC meeting may likely reduce the MPR which may further reduce the rates across all the tenors of Tbills.

All things being equal, this is a good news for equity investors because they may begin to channel more
funds to equities or equity based funds

However, This is not to say we should stop investing in MMF because every instrument serves its purpose.

Especially for those just starting out (Newbies), the low risk investment terrain is better while you build
more confidence before you venture into riskier investment windows.

Remember first consideration is RETURN OF INVESTMENT BEFORE RETURN ON INVESTMENT.

One thing is sure that will land you into your dream portfolio is consistency - never stop investing.

Eventhough this message echo all my write ups in previous pages of this thread.


"The next MPC meeting may likely reduce the MPR which may further reduce the rates across all the tenors of Tbills."

Eventhough this may likely not happen as many bet MPR will be held like it has been held since since last Quarter of last year,I also follow in this sentiment.


NOTE - Yields and Rates across board will continue to reduce due to falling inflation numbers however, The reason for my sentiment towards cutting MPR is simple: CBN will quickly drive away hot money (foreign investors money) from the economy; Now, this hot money is part of the reason we currently have forex liquidity for the stability of Naira dollar exchange rate.

So you can see, CBN is boxed in, if they need to reduce MPR, it will be slow to do it but Cardoso is in no rush to touch MPR now.