₦airaland Forum

Guys, have you been using Meta AI in Whatsapp
I consider it dope and reliable. Check this out:

dacool1:
Hello everyone,
Can anyone help with the calculation of the true yeild. Also has elanyone used I-invest app before?

Do
discount/ (100 - discount)
Then multiply by 100 to get it in percentage

jedisco:
No objections to the most part.

You mention policies- ultimately, its the past govts policies that led us here. Reason why I've hardly raised the current CBN gov yet. I have no reason to believe Cardoso has done badly given the stick he was dealt. The issue is those who defend these policies without cause. While Emefiele was reeling out his policies, lots even on this thread defended them. We were told it was 'smugglers' driving the exchange up while same person was boasting about how much his BDC friends were making from round-tripping. Even till date, many can't link the connection between the subsequent debacle and the actions of the previous govt.

I have held that as this govt has taken a different approach to the economy than the last then ultimately, I expect outcomes should be different.

When I say defend, its not just about money. Yes, money was spent but alot of macroeconomic policy changes were made when the naira crossed 1500. The result has been felt. The exchange rate means little what's more important is a stable rate and low inflation.

Lastly, people keep mentioning diesel like its a silver bullet. Yes, its very important but in 2024 moreso with our population growth, refining oil we produce and stopping there is hardly going to put us on the world stage. We need same self sufficiency in agriculture, textile, basic tech, transport all occuring at same time

You're right boss.

oluayebenz:
They don't realize that Nigeria is making more and saving more forex ever than before.

Soon importation of fuel will be gone forever and forex demand will be very low.

As at now, In-market rate for dollar exchange is 920.

I don't understand how people think CBN is defending the naira, if they are doing so, CBN will bring a fixed rate but it's totally opposite.
Fx is dropping seriously and that's the true meaning of floating a currency.

Infact it might drop to 600 anytime soon

If I have to choose between 600 to USD on a $30bn reserves and 900 to USD with a $50bn reserves, I'd choose the latter.

I don't think the naira is worth up to 600 anymore given how much naira we've printed in recent years.

Imo, the CBN should start working on building a healthy level of reserves going forward.

While on the fiscal side,
1. They should start working on tackling this persistent decline in oil production. I read this morning that just cos of some people playing politics by stopping the deal that was to transfer MNPU's assets to SEPLAT, we're missing out on almost 500,000bpd capacity. I really don't see why that SEPLAT deal should not have been allowed to go through. NNPC claims they spend $48 to produce every barrel of oil, imagine that ineeficiency, meaning if oil dips to $50, our economy is in trouble but last I checked, SEPLAT was doing only about $12. Look at that massive difference. NNPC will have to sell oil at $130 to meet up.


2. They should be more aggressive dealing with bandits in the north, so we can have better results from our agriculture. Imagine having trillions in defence budget, yet we're still hearing excuses. There are lots of well known bandit camps in the north, those camps can be left to exist even though their kingpins have taken out hundreds of our soldiers, yet we've besieging Okuama and ignomaturu?? Doesn't really make sense that they haven't leveled those bandits' camps.

3. One ton of Gold is about $80m, South Africa, despite several years of mining can still do 100 tons per month, why can't we who haven't been mining as much from our reserves target about 10tons per month and be earning $800m per month. I learnt there are places in Zamfara where just rainfall alone will expose some gold deposits. At 15 tons per month we could be getting $1.2bn into the economy and from that maybe $200m -$400m as taxes and royalties.

@jedisco,
Your points are valid.
However I object in these regards:
1. Saying the CBN has used billions to defend the naira: True the reserves have dipped by $2bn maybe even more, but it's wrong to assume the dip was due to naira defence. From what I know only $64m was sold to BDCs at "defensive" rates, fear did the rest.

Last year, we heard that even though our gross reserves were about $33bn, the net was actually just about $3bn, cos Emefiele owed $7bn in backlogs, $7bn to jp morgan, and some other loans.

Now that the $7bn backlog are cleared what we should have is $26bn, but we still have $32bn.

Who's to say that the $2bn used wasn't to clear backlog or service a loan obligation?

2. I don't think we should be making reference to policies like naira4dollar and other inefficiencies that Emefiele had going as though he's still the one there. Was it not under him that banks were hoarding $7bn, hasn't Cardoso changed that, was it not under him that corporates were using $10bn as collateral for naira loans, is that still happening? How about the fact that people could sell at 750 on the streets, and Emefiele wanted them to sell at 460, is that the case now? Today street traders are buying at 980, banks are buying at 1030? Isn't that a complete different situation?

3. As of today at least 10% of our forex demands have been wiped off, cos diesel is now sourced locally. The drop in demand could reach 30% when PMS shipments start too, and could exceed 50% when you consider that more people(Nigerians and foreigners )are now confident in holding naira assets as opposed to the "save in dollars" campaign that sold last year. I do think you should factor this in as well.

chukzyfcbb:
Abeg when tbills auction go happen nah

Since Monday last week , no show.

Na wa o

There was a PMA last Friday. There should be another one next week Wednesday 24th.

ositadima1:
Is short-selling even possible within the Nigerian financial space? Are there brokers willing to lend stocks to their customers for the purpose of short-selling? This is an interesting proposition to consider.

I think is available. For institutional investors at least.

But there needs to be derivatives like "call" and "put" options as well as margin leverage to really make it worthwhile.

Check:

https://ngxgroup.com/ngx-download/ngx-securities-lending-report-for-april-2/

oluayebenz:
If this is true then the person deserved to go bankrupt.

People are just selfish.
You want to short your country's currency knowing that it'll cause millions of people to suffer, but you don't mind, you only care about your selfish interest. It's too bad.

If I short Dangote cement or AccessBank for instance, only billionaires feel some impact in their net worth, that's the kind of shorting people should attempt, but they're mostly too inexperienced to try that, they'd rather short the currency and keep hoping that ineeficiencies continue.

emmasoft:
@Tranquility2345 the emphasis in my post is the word first. I'm not saying safety of capital should be the only motivation for investing but it should be the first motivation and not returns... of course returns is a motivation but should not be preferred over safety of capital.

Your post was clear enough boss.
Anyone should have gotten the point without any issues.

RayRay06677:
Should take it back to less than 5h

Those who don't see this as good enough should start bidding USD up to 1900 too na.

I know a guy who spent around 300m trying to bid USDT up to 1124, his entire orders were filled, USDT is still at 1112 on that platform.

oluayebenz:
In-market rate is now #950 / 1usd

Dollar will likely settled at 700 by June

I would say the CBN should pause at 900 to 1000 levels and start building reserves.
They've done a lot of work regarding boosting supply by way of crashing unnecessary demand and hoarding.

They should now complement it with reforms that significantly lessen the burden for folks that genuinely need FX. I should not be waiting for weeks to get my forms A/M treated, I shouldn't spend more than an hour to process my BTA/PTA etc.

Then while these hoarders continue flooding the market, they should mop up and target a $40bn reserves level in a few months.

Itsrm:
I thought so. Also, like I noted, the rate is a moving average. Can be positive today and negative tomorrow(saw this happen in 2020)

Not seen any fund that compares to the comfort of that "risk free" 25% from TB(with interest reinvested)

Very correct. It can easily do -10%.

Itsrm:
Those who think banks will have any significant reduction in profit this year will be shocked.

Those banks have perfected the art of making money.

In 2023, banks booked just #440 gains on a dollar (906-466) and they made that much.
This year, they have #700 realized gains (1606-906) cos when the CBN forced them to sell in February, they mostly sold above 1600.

Then add +25% gains in interest income from lending, and another +70% gains in interest income from securities.

I expect most tier 1 banks to gross over 3trn this year, and net over 1 trn.

Itsrm:
I've not taken my time to look at this coral balanced fund but my guess is that it's exposed to the stock market.

So find out what the underlying assets are. If my suspicion is right, be rest assured that the 27% can also be a negative figure tomorrow or it can go as high as 60%.

Nothing is cast in stone.

This is the accurate explanation. Balanced often mean a balance of debt and equity instruments, since equities are at +36% YTD, and debts are over 20%, the 27% is in line.

jedisco:
I don't see this as an argument to be had. It's not a direct comparison.

In investing, I first of all pick a strong market before then seeking strong players. The point being missed is that the continued and predictable devaluation of the naira over decades has already gives folks invested in strong currencies a headstart.

Very few investors outperform the index they are invested in. I'm not cherry picking stocks as I can walk into any market and pick a stock that has done 10x even when the market is languishing. The comparison shd be- would 1 million invested in Nigerian stocks via an index (if it exists) in say 2017 have outperformed same amount invested in the S&P or global index in 2017 and left till date?

You still miss the point.

You're bringing up USD investment vs naira investment.

Nobody is talking about that.

What we're saying is investing in naira assets vs HOLDING USD purely for speculation.

Don't mix it up

LordAdam16:
When did the intervention start?



Of the $7B backlog, they cleared $5B and struck off $2B as invalid.
Of that $5B they cleared, they got $2B in loans from AfriEXIM bank and $2B from FPIs.
CBN also now receives oil sales receipt from the NNPC.

And they did not need to dip into the reserves until they started the intervention.
Most of the money used for the backlog clearance will have to be repaid.
They cleared the backlog with debt.



So if it will take $3B to move the rate to 900, why not spend $10B to move it 300?
In fact, why stop there?
Why not spend $13B to move it to 100. Or $15B to make it $1 to N1.
After all, the reserves are not for decoration.

Spend the money to peg the rate and your feelings will keep it at that rate forever. Like magic!

-Lord

I think you should just sell your dollars and rest.
As far as I'm concerned, the government owes no obligation to granting your whims of dollar at 3000 at the expense of citizens' purchasing power.

It's your money, you keep it, you lose it, you speculate with it, it's your business.


CBN sales to retail users have only been about $64m all year, but just as greed drove rates to 1900, fear is being quite effective now too. 1070 in some corners already.

jedisco:
I agree with your last paragraph in addition to the hidden fact that due to recent UK immigration change has resulted in a significant reduction in the number of students going for masters abd hence less chase for forex.

However, the first section on FPIs and money supply is convoluted. The CBN printed (i.e increased our money supply) by over 50 trillion in the last few years. Was this done due to increased forex inflow?



You're comparing apples to oranges

What local investment instruments would have given a reasonably safe 20% yield between 2017 and 2024?

What would be the return today if that dollar converted in 2017 was invested in the S&P or a global index?

Have you seen what Argentina' interest rate is? Argument could be made to move all investments to Argentinian Peso

What do you mean by convoluted?
Why do you think money supply figures had big jumps in June 2023 and February 2024?

$30bn in dorm accounts is part of the broad money supply. At 460, it's just about 14trn but at 800 or 1600 you can do the math.

You're saying government printed blah blah, how does that relate to the point here? The point is lower exchange rate reduces the FX component of your money supply, you shouldn't assume that I said exchange rate is the only reason for money supply growth, you'd be speaking fallaciously.

2. What do you mean by "comparing apples to oranges?" Again you must have read with wrong context, and in such a case what you should do is seek clarification about the point being made rather than assume wrongly.

The point is comparing the returns between holding idle dollars for speculative purposes for 7 years versus holding naira assets in thesame period.

Also 20% per annum yield on naira assets isn't that far off. Tbill yields through2019 we're at about 22%, commercial papers, bonds stocks etc are other options TRANSCORP did close to 1000%
last year alone, so 20% is actually conservative.

Our 40 months streak needed a disruption that was as massive as COVID, as well as a derailed emefiele to get broken.

COVID was so bad that for the first time in history, oil sold for less than $0!!!!

Donsheddy:
All this one na plenty talk...
Anybody wey join the business of hoarding dollars for short term naim go cry....
I don't know how far the naira will gain against the dollar but one thing is certain it will still pump again...
And if it does it will certainly break the current...
We just the postpon the inevitable....

As long as we still have corruption...
Insecurity...
Millions of Jobless youths...
No industry...
No electricity...

Etc....

Naira willl never be stable e go rise....

See how we gradually rose from 150 to 1900

Now dancing around 1100 is this gain or loss ...

Still the same mantra of the old...
Borrow borrow borrow borrow....

First the window of 1900 was brief. Not many people sold at that price they were waiting for 2500, now they wish they had sold.

Last crash of 2015-2017, dollar went from 190 to 520, when the CBN crashed rates we had 40 months of stable rates at 360 before it started moving to 390, 450, 520 etc.

20% compounded over 5 years = 358%.
Those who kept their 520 dollar in 2017 and waited till 2024 can now sell at 1100 only 212%.

As long as your dollar is lying idle, speculation will always underperform.

It's also a good significant development that just as we ni longer need dollars to import cement, we also ni longer need dollars to import diesel.

People are entitled to their opinions and negative sentiments, it doesn't mean they count for anything.

@LordAdam16,
1. The question is what makes you think your selfish opinion that the CBN should allow citizen's purchasing power get eroded should count for anything? That what you should address and leave Penny wise talk.

2. We're currently in week 15/52 this year, your ignorant assumption is that the CBN has taken $1bn dollars every 3 weeks, why has our reserves not depleted by $5bn

I wonder why you're blind to the fact that $7bn of backlog were knocked off, and currency's value has been restored from 1900 to 1100 yet only $1bn has been used from the reserves?
Now that there's no more backlog to clear and they only need to gain #100-200 more instead of #800 that they already did. If you were objective enough you'd see that they wouldn't need up to $3bn more from the reserves.


Again stop assuming in ignorance that reserves are for decoration. They're serving their purpose at this time. The only surprise here is that only $1bn has been used when it should have been up to $10bn.

LordAdam16:
Whoever wants to offload has had a few weeks to do so.
All the way from 1900 to 1000.



This is wishful thinking.
Demand will increase because folks can get more dollar per naira.
A phone that costs #200K in late February will cost 100K at #1000.
Plus, the minimum wage will increase in May.



All of this talk about pause is a sly admission of concern that the CBN is biting off more than it can chew.
And y'all should be worried.
Somehow the CBN was increasing the reserves while clearing $5B in backlog. Yet somehow, after only 3 weeks of intervention, reserves declined by $1B.
All the FPI inflow, the remittance surge, the CBN handling NNPC revenue, deferring IOC repatriation of their share of oil sales, and hoarders disposing $ did not stop the CBN from dipping into the reserves. We'll see where this deceptive dance ends.

The truly exasperating detail is that the short-term securities the FPIs loaded up on can be disposed quite easily before maturity whenever they want and they'll still make out with bandits.
Or do you think if the oil price starts falling today, the FPIs will wait until next year to get out of dodge?

-Lord

Summarize your points?
1. Is your opinion that the CBN did wrong by managing the manipulative tendencies in the market and you would have preferred they let it slide to #2500?
In whose interest? So that you can profit, while tens of millions of citizens lose purchasing power?

2. Why do you assume or make it sound like the CBN vowed they wouldn't ever take funds from the reserves? What do you think the reserves are meant for?

3. Reserves position shown on the CBN website is on a 30-day moving average, so it's erroneous for you or any reporter to assume the reserves dipped only after they cleared the backlog.

4. You do not have any record to support your assumption that everyone who has dollars has sold off from 1900 to 1000. There are still some like you who for selfish reasons wish woes on the nations economy, and still expect gloom and doom. Of the $30bn in dorm accounts, I'm sure more than $15bn are still lying there idle.
When you expect gloom and doom on the currency and seem to get angered at progresses like this, you should remember that for every 1 nigerian that profits from naira's crash, 100 more Nigerians suffer. So the interest of those 100 Nigerians are more important.

ogawisdom:
More on the USD decline story

The paradox is that at #2000, people would hoard and demand more dollar as safe haven, but at #1000, people would offload.

Thus making dollar scarce even at #2000, but plenty at just #1000.


The CBN should just pause for a bit once it reaches #1000, and then start building the reserves towards when FPIs will exit or a shock comes in the global oil market.


If they can build the reserves to $40bn by year end, FPIs will likely rollover their maturing bills next year.

ogawisdom:
You missed the point? I have USD card and I will need to go to abo.ki to get dollar & bring to bank before I can fund it, why can't the bank fund it directly for me?

Sorry boss.
I think if you're doing letters of credit, school fees, PTA, or just invoice to bring in machinery, the bank will fund it for you. But if it's to pay for apple music, or shop on Ali express, given our limited FX, I don't agree that the bank should find you dollars for those, I think you should find your own dollars or canvass the vendors to accept your naira and find the dollars themselves like Netflix is graciously doing.

Maybe when we have enough dollars to build shock absorbing buffers, and meet other critical needs, the banks can start pushing this convenience again. I remember gtb used to be $3000 a month about 5-6 years ago.

Acidosis:
Nice, but too early to determine capital gains. It should be the value of the Naira in February 2024 against February 2025. If the CBN sustains the tempo for another 10-11 months, then investors can gain even more.

True. Those who purchased 364 day papers are poised to make over 80%.
Those who purchased 91-day papers will make close to 70% when they redeem later this month.
However those who bought 65 day papers have already realized their 60% gains.

Anyone who bought T-Bills in February month when USD was at 1900, didn't just make 20-21%, they made close to 80% or higher in terms of USD value of their assets.

19m was only $10,000 in February.

Doing secondary market 65 days at 15% on Feb 3rd, that same 19m is now $16,250.

That's naira delivering interest earnings and capital gains totalling 62.5% in just 65 days.

oluayebenz:
By June.
Rate will be below 1000.

Hoarders hmm 🤔

Some people think the fact that we're using FPI money is an issue. The fact is dollars will always flow into the economy, but it's better to get them in at #1000 instead of at #2000.

Remittances for instance regardless of exchange rate, at least $20bn will still flow in.

If they're exchanged at #1000, money supply grows by 20trn, if at #2500, it grows by 50trn,

So while we may expend $1bn on interests and capital gains to FPIs, we're saving 30trn in excess money that would have added huge inflationary pressures.

Also, with naira assets looking more attractive, there's a significant decrease in thirst for using USD as a store of values by resident Nigerians, this is driving down demand for USD, and perhaps increasing supply with some individuals now incentivised to sell off their USD positions and make better returns on naira assets.

ogawisdom:
Must they always involve BDC give directly to banks and let banks allow us access to at least 500 USD on our debit card for international transactions. Just like it has always been.

Let's kill the USD & crash it to below 800

It's not the government's or bank's responsibility to source forex for anyone's consumption. If you want to spend forex, get a USD card and fund it.

A better advocacy would be to insist that YouTube, apple music, openAI and the likes accept naira payments for services rendered to Nigerians.

They should take a cue from Netflix

alezzy13:
Lol. I like your confidence o. But spoke with my account officer and according to him it's quite unlikely to hold next week, unless the holiday turns out to be Thurs - Friday (unlikely).

Abi CBN and DMBs wey go process the bids no dey go holiday??

If the holiday falls on Wednesday, the practice is to hold the auction on T+1 or T-1 (Tuesday or Thursday next week).

Remember some people's bills are maturing next Thursday so they'll be rolling over the debt, selling to new subscribers ti redeem the naruring ones.

It's how it's been.

socialmediaman:
You this Jagabantist. The report says Foreign Exchange Inflow for March. Stop giving useless analogies when a report was published in clear language.

They didn’t say forex inflow in the first week of March, or did they say forex inflow from a specific category, the report was clear

And I have educated your ignorance by saying it's only the FPI component.
That headline did not say total FX inflow for March was only $1.5bn, neither did it even say total FPI was $1.5bn.

The fact is total FPI inflows for March were over $2bn, and total FX inflows were over $4bn.

You concluding that total FX inflows were just $1.5bn based on that statement must be the reason you scored low in exams like UTME English and SHL verbal reasoning if you ever took them.

socialmediaman:
Foreign Exchange Inflow not FPI/FDI. Don’t be lazy to read:

https://www.thecable.ng/nigeria-recorded-over-1-5bn-fx-inflow-in-march-says-cbn/amp?/nigeria-recorded-over-1-5bn-fx-inflow-in-march-says-cbn#

You're obviously ignorant of these things.
I gave an analogy using SLOT stores and phone brands, read that again with an open mind, you should understand the concept.

Again, the $1.5bn was FPIs (sales from just a single brand) the reports you cite are for total FX flows(sales from all brands all together)

If the the engine of Lexus RX350 is now 2.5m, and last year the whole car was 4m, wouldn't it be foolish for anyone to conclude that the price is better this year??

The logical approach is compare the engine price last year to the engine price this year. Or the price of the whole car last year to the price of the whole car this year.

Your faulty approach is comparing a subset this year to the overall collection. That's grossly ignorant.

socialmediaman:
You and the other poster can read the report yourselves, I published the link already. 2023 showed an average of $2.3 to $3.5 billion monthly.

People should at least do some research on their own and come up with reasonable arguments. I can’t spoon feed everyone

What you need to cite is a report on FPI inflows cos that's what the $1.5bn news is about.

What you've done is basically like SLOT saying that they sold 1.5b per month from Tecno phones this year, and you go about saying last year was better cos they were selling 2.4bn -3.5bn monthly.

You're inaccurately comparing flows from just one channel this to overall flow last year.

A reasonable argument is tell us how much SLOT made from Tecno sales last year and compare it to Tecno sales this year, not the ignorant approach of comparing Tecno sales this year to entire store sales from all brands last year.

FPIs flows in March 2024 are at least 5x more than March 2023, that's what you need to understand!!!!