₦airaland Forum

emmanuelewumi:
The big boys buy public offers at the very last minutes, usually few hours to the end of the offer

Is there a possibility these institutions knew beforehand the government was tinkering with increasing the rate and hence stayed away or that they worked in tandem to hoodwink the government into further increasing the rate?

I don't want to believe that the internal decision for these institutions to invest was done and dusted within 9 hours. The decision must have been made long beforehand while they bidded time

emmanuelewumi:
Over N800 billion was raised within 5 days for Sukuk 4.

I can tell you that the total money realized from retail investors and those who invested N100 million and below is about N80 billion.

And the additional N750 billion was raised by the big boys ie Banks, Pension Fund Managers, Insurance companies, Mutual fund managers and other institutional Investors about 9 hours before the deadline which was midnight of 23rd December 2021.

There is a reason why DMO sent messages about 12 hours before the deadline that coupon had increased from 12.8% to 13%.

Out of curiosity, is this confirmed/verifiable?
Such behaviour should warrant an investigation

jabolo:
If I may. You're actually reinforcing our view. How can an FGN bond be priced at 13% with a corporate bond at 12%? This is only possible if the said corporate has significant foreign revenues that can be said to 'pierce the national veil'

The country can always print money to service its bonds, or tax the corporates more.

And, if the nation defaults, the corporates are marked down because political risk has increased in their operating environments.

I think the advisors on the Sukuk screwed up and overlooked their mandate. I deal with these guys all the time. It's year end - they get lost and giddy about their individual bonuses.

Here, I'd say it's not the volume of oversubscriptions that is the success benchmark, but the lowest cost (to the country) to achieve the required bond amount.

Peace.

Thanks for this. Especially the last paragraph. Same thing they say after every borrowing spree.

The last eurobond offering was oversubscribed and they boasted about it forgetting it was offered at a rate almost ten times higher than any Western nation would borrow. Even individuals borrow at much lower amounts. Somethings don't just add up

Headlines like this are why I object when people use phrases similar to 'leave it to the professionals in power understand better'

Borrowing isn't bad but when a government official sees borrowing from the sake of it as an achievement without considering the rate, what those borrowed funds are used for, sustainability e.t.c, then it leaves me scratching my head.

OpenHeaven2019:
The temptation to put profits into another project.

I don’t do it again.

These days I move my profits to my bank account so I don’t FOMO into another project with the profits.

Hehe... The urge to fomo is real

DaemoLee:
PSG showed me shege, BETA currently showing me Shege.

Made lots of money from SHIB,
Made millions of naira from GALA.

Lesson I : Any coin among coins/tokens I hold that rally up and gave substantial gains, I sell to USDT and withdraw to my bank account and wait at least 2-3 months before deploying part of the fiat again in buying another well studied coin/token.

Lesson II : I will never ever buy newly launched token again never. Not until at least 6 months after launch, minimum.
I was very lucky with C98 but BETA has choked me.
I know U warned me, but I don learn lesson.

Hehe.... Usually, after a huge win, the tendency is there to become complacent and overconfident leading to huge losses afterwards. Also, with such wins, it's difficult to guage the try state of the market.

What I do is use profits to buy betece or eith. Now, more options are available. One can buy stables and lock-stake them for at least a week until the hype dies down.

Looking at binaz yearly overview, finally, dem chop trading fees last year.

This year, hoping to trade less and strategically average in or outta the market when the time comes

Looking back over the last year, would be nice if we could share our best and worst trades and also how we utilised an important lesson learn. Best trade can be in terms of ROI or something different

I'd go first

1. On best trades, I'd list two. First was loading up on certain alyts this time last year. By then, Bitc0in had rallied and alyts were lagging. By end of Jan 2021, coyns such as dot, uni, sushi were up 5x.
A second Best trade was on doge. Hit one of its rallies to the teeth and my portfolio swelled overnight

2. Coincidentally, worst trade was also on doge. Failed to see the larger picture and didn't.

3. Main lesson learned was also from doge hehe... Having tracked shib for a while and after breakout seeing it was following doge's rally to the teeth... I positioned and sold the top beautifully well. Annoyingly, I put most of the profits back into doge and now looking for an exit... Meme coyns dey vex finally

Ibime:
No, I don't even know what those parachains are about sef. I just know that $30 has been a safe price for DOT since Q1 so buying at $29 seems OK

Looked into them briefly since I hold some dot... Got busy and unfortunately, the ones I had in mind have ended... Funnily, I just remembered buying dot and uni this time last year at about 4 and riding both to 20. Hopefully, 2022 brings similar profits with less mistakes

ololade001:
Dot ehn, I am waiting for 100 dollars Sha ooo

Hehe... Seems the parachain talk was a 'sell the news' event similar to that of Ada.
Could have taken a shot with one or two of its parachains

Mazinewmoney:
Jedisco. 1inch please?

Not traded this before and no idea about the underlying tokenomics. It's a defi coyn and they've generally underperformed recently.
The weekly chart though sitting on support doesn't particularly inspire confidence.
Let me ask, why are u interested in it?

Alexis11:
Alright boss. But you can still check it out and let's know your thought.

You know we trust in your analysis.

My brother/sis

Let me ask, what is attracting you to Metis?

Alexis11:
METIS too

Never heard of this coyn. For now, except I'm seeing serious alpha elsewhere, I prefer to stick to coyns I know

Frezhkid10:
Nobody is talking about BNB..abeg want to buy this BNB dip and hold for a year..is it advisable??
Cc:
Jedisco
2ubaba

Bnb as a solid layer 1 with sound tokenomics. It's also an exchange coyn which binaz has done well to push. It's one I hold.
It's chain has not done anything particularly differently from the rest and it's now fighting off competition from the rest who are more decentralised.

That said, it's held tremendously well against betece this year. It's close to ATH against betece but personally, I don't think it's ready for a breakout just yet.

All said, at a market cap of almost 90 b USD and this late in the larger market cycle, I expect it to keep doing well but not expecting tremendous gains from it relative to others

Ibime:
Dropped 4% of my portfolio in Dot at $29 and another 4% in Matic at $2.47. Still playing very cautiously.

Did you partake in any of dots parachains?
The PA on dot has been annoying....

If matic gives me 2, I'd add up... Otherwise, I'd let my holdings from 1.8 ride

OpenHeaven2019:
Jedisco please TA on FTM please.

Happy new year

Ftm is a tricky one due to bitc0ins PA. I'm leaning towards Bitc0in coming down to take out 42k low hence I've largely held out on adding to alyts except for matic and crv I bought in early December.
I largely hold (and trade) layer 1s on the back of their projects. FTM is not held it before and largely unaware of it's chain.... But I gather it does have exciting stuff under the hood. Also, it has a synthetic stable coyn (like UST). Not so sure how much it's grown. It was the development of UST that made me load up on Luna at 40.

Looking at its charts, 3 things I note

1. The last monthly close against USD was a monster one.... Such a candle could easily push prices up. I see similar candles against bnb and betece

2. Looking at the TVL and comparing that to the market cap across it and other chains, ftm does look impressive. It's market cap is relatively modest while still having good value locked. It was on this metric I bought CRV which has paid off

3. The daily looks like a bullflag which is about to breakout. The weekly OTOH, looks different. I'd wait for a weekly to close as a weekly candle closing this way could easily push prices in the opposite direction as on previous occasions to retest support.

In summary, like with layer 1s I hold, e.g Luna, Avax, if I'm bullish on the chain, I look for opportunities to buy, make earnings holding the coyn and average out when my targets are hit or market conditions change. With the hype around it, if it does pullback to between 1.5-1.7, I'd buy some..

How much does this chap pay nairaland for these obviously sponsored posts

freeman67:
You are not considering the prevailing Bond Market rates... MTN Nigeria issued a 10 year corporate not quite long, same with Dangote Cement and Lagos State Government. Their rates were all in the neighborhood of 12%. All these are to be considered in determining rates. Like I ask before and will still ask again does it mean that the experts of these companies and state government are not being prudent too..? These companies and sub-national Bonds are well rated and have not defaulted too. So the risks with them are relatively minimal.

You should be looking at the inflation rate and devaluation and currency devaluation in the USA and China when using their bond rates as reference.

Commercial bonds should reference off government bonds not the other way round. Also Nigeria is hardly the country to believe that 'professionals' in government offices always have the interest of the nation at heart. This is a country where recovered funds are easily relooted. 100 million if given to the right people can easily do wonders. After all, CBN continued to issue new BDC licenses and sell dollars to them even when it was obvious for years they were round-tripping.

Government bonds serve as a benchmark for commercial loans, interest rates, new money being printed e.t.c which all have a direct effect on inflation and devaluation. Hence why many nations tinker with government borrowing rates as a means of controlling inflation.

ojesymsym:
How do you do this? Do you have to handle the logistics and storage. I am assuming you are not located in the region where those commodities are being sold.

As a first timer, being in the northern states gives a better overview. The recent ones I did were done without being local as I have a good network on ground.

Except you're buying trailer loads, storing grains is relatively straightforward. A well aerated room, free from rodents/rain and one that'd permit regular checks. It's also sensible to put wooden pellets on the floor before laying bags. Also, I prefer to keep some space between stacked bags and the wall.

Buying is also straightforward. Village markets used to be the cheaper go-to option. But the current security situation makes sticking to markets within the city safer. You go early and lucky enough, you could get your bids filled. Or liaise with some market heads to arrange a direct supply for you (if buying in bulk). Also, in the market, you could easily find boys who'd help put in the chemicals they use to store grains into the bags and handle loading and offloading for a token. Stuff is transported to an already prepared storage room. The other thing is worth making sure the grains are dried.

Selling has some tricks but largely hassle free as grains are staple. All one needs to do is first confirm the prevailing market rate. For small amounts, you might need to take them to the market. For larger amounts, once one or two market folks know, they'd organise transport and pick-up from your storage location. I prefer the second though sometimes I sell at slightly lower than market rates. Timing of sale is also tricky. Sometimes prices rise into Dec/Jan and plateau. Other times, they rally into the start of the rains

The risks are mainly those of rodents, rain, pests and knowing your way around the market. The first two are easy to control if properly stored. Worse still, u get a cat. Knowing ones way around comes with experience but buying grains are relatively easy.
The last is price- for obvious reasons, the price of staples would usually increase into the dry season. Some years, appreciation could get to over 100%. On others, there may not be much increase. But if bought at the right time, one would almost never sell at a loss.
The recent devaluation in the naira has also meant grains are relatively cheaper in Nigeria hence surrounding countries also buy further pushing up price.
The price variations on a particular grain are difficult to predict so mostly, I split across a number but still have most of maize.

emmanuelewumi:
.

1) Pension Fund Managers, Insurance companies and other institutional Investors are more interested in dividend yield and the long term earning growth of the business

2) You can't get Bank loans of 12%, except you use your fixed deposit Investment as a collateral.
Any business in Nigeria that can't give one a minimum profit margin of 16% and above is not worth.

Just learnt that some commercial papers offer as high as 15%

3) US is also printing money.

4) Inflation is a major problem all over the world. Investors should be concerned about how to get returns that can stay ahead of inflation.
Devaluation is the aftermath of inflation compared to inflation in other countries

Every country prints money (over 20% of circulating USD was printed within the last 4 years). But very few countries use new money to facilitate huge payouts to bond buyers. Every country needs widely available single digit commercial loans to drive investment. A sustained double digit bond rates zeros that chance.

I think we differ on certain fundamentals on this subject matter. You're looking at it from the point of an investor which understandably should go for the best returns. I'm looking at it from the long-term effects of such such rates on the economy if sustained.
My view is in keeping the CBN has followed a more tapered approach of getting the best rates of whatever amount they want to borrow thru TBs. Your approach is in keeping with the DMO who are going with prevailing market rates irrespective of the long-term effects.

We've had a prolonged discussion on this matter and I think I've done enough to point attention to the fact that bond rates have wider long-term implications. No need going back and forth, but the coming years should decide

emmanuelewumi:
In this case it is experts at DMO that determine the coupon rates after taking into consideration inflation and future currency devaluation.

Ask yourself why the coupon was even increased from a so called high rate of 12.8% to 13%.

Investors will always move money to where they can get better returns, I hope PENCOM will soon remove the restrictions that prevent pension fund managers from Investing outside Nigeria.

Currently Investors are getting dividend yields of 11% in the stock market, dividend payout ratio of 60%, this is far better than a 13% coupon from a bond on the long run

The 0.2% increase was another thing that didn't add up. When the increase was announced, I was expecting a much lower subscription. Except they were yet to fill their bids at 12.8% (which was highly unlikely), then further increasing the rates doesn't add up. But then, this is Nigeria....such increase could easily be due to personal gain

I support the restrictions on mandatory pension funds. Nigeria is a developing country that needs investments and hence should lock in as much liquidity as possible. Similar restrictions should sensibly be extended to banks too (if not already in place)- that would limit majority of profit investments locally except in certain circumstances e.g expansion

DanteSilva:
I just told myself that if my relationship ends, I am going for a white lady, a lot of Nigerian girls are morally debased... if you think I'm lying travel to Europe or other African countries and see the high quality and standards of their women

Not true. Talking down on women of your kind does not elevate your status. A white lady doing same would likely not feel remorse or come back to beg.
You can break up and date whatever lady you desire.

Biafran4life:
Why are you seeing the 12.8 percent as wasteful from government.Many business men I know who do not know about this passive income and compounding thing will take you as a joker. When you tell them for every 1 million in a year you will give him #128,000 thousand..He will tell you he will likely make more money by selling recharge card with such amount.He will go ahead and tell you thousand of businesses he could do with such amount that will yield far better than that amount.Or you feel is only institutions that should participate in such things and money bags.

Government borrowing rates are very different from individual rates.

More than 10% for government bonds is extremely high. Very few countries offer that- and such countries all have one thing in common. They have about the worst performing currencies.

Business folks may get higher rates of returns but it comes with added risks. You don't expect PFAs to put folks pensions in recharge card business. The reason I didn't partake in the last bond was cos I had used free funds I had to buy grains backs weeks. A bag of maize I bought for 17.5k then now sells for 25k. That's over 40% in about 2 months and prices may still rise before the rains. But then, it doesn't come with the safety a government backed bond gives

emmanuelewumi:
It is a two way thing, when bond returns are low funds move to the stock market, when the stock market is bullish prices of bonds will fall and yield can be as high as 20%.

Successful Investors will always move funds to the asset classes that will give good returns be it real estate, metals, commodities, money market, forex, bonds, equities etc.

Investors would invest where they get the best rates but it's the job of the government to eck out the best rates when they go borrowing. So far they offer exorbitant rates on both foreign and local bonds and come back and say oversubscription shows investor confidence.

There are certain effects of current bond rates
1. The stock market will struggle to go on any sustained rally as institutions will rather take the assured 12% on bonds than.

2. Bank loans will struggle to get below 12% as bond rates are one of the benchmarks used. Our economy needs single digit loans

3. Sustained government local borrowing at rates over 10% (if large enough) means the government is likely printing money at that rates. Hence inflation will not get below 10%

4. Currency wise, by a mix of inflation and devaluation the currency will struggle.

I wonder how the government really benefits from these rates.

I'm not so much of a long-term bond person. But if given the option between a 10yr US bond of 1.4, Chinese bond of 2.8, Nigerian bond of 12% and Argentinian bond of 48%, my pick would be between the first two. The maths always adds up at the end

emmanuelewumi:
Will you buy a 10 years FGN bond at 3%? Will you give a loan at 3% for the next 10 years

Investors are not fools, the people at CBN and DMO are not fools.

Nobody will buy a FGN bond at 3%, rather it will lead to a bullish run in the secondary market for bonds as we have few months ago when bonds enjoyed 60% and more capital appreciation from their bond Investments

The pricing of a bond must consider inflation and currency devaluation.

Most on this thread stopped buying TBs when they dropped below 10%. That hasn't stopped offerings from being oversubscribed by over 10x. Fact is that the institutional money the government relies on to fill up such bonds have shown they'd bid for rates much lower than 12%

The just concluded bond which was open for just 5 days was oversubscribed by over 300%. The one before by over 400%. If this last bond offering was between 7-10%, it'd still be oversubscribed. It was clear this last offering would be oversubscribed. If a government who spends most of its revenue servicing debts insists on continued borrowing, then they should do so at lowest rates feasible.
Will you take on a loan at 20% when you could easily get same loan with same terms at 14%?

louqas:
Another western propaganda.

They dont want any competition in Africa

But africa needs development and China is willing to assist without any strict preconceptions like legalizing gay marriage and following Breton woods economic policies that will ensure we remain tied to western imperialism.

When western countries give loan to africa .....they deceptively call it development assistance but when China give loan to Africa they call it debt trap.

The fear of China is real in the west and understandably so.....no one want to lose position of power and influence.... but its only a matter of time before China becomes the world power

Can't like your post enough.
Throughout African nations, we can see infrastructure Chinese loans are used to build- even though it's not a competitive process, but one good policy of China is that they don't give out cash which leaders in African nations will gladly steal- those loans are tied to specific projects and the host nation has to provide the full counterpart funds from the start.
Now if compared to Western nations, who will usually hand out cash knowing fully well that the cash will be looted and stashed back in their banks.
We can see the use of Chinese loans....has anyone ever asked what all the world Bank, IMF and western loans are used for?

I've taken so much hit over the last page simply cos I asked a question- why a government that spends majority of it's revenue servicing debts is taking on more local debt at such high rates when it could easily push rates lower and still get the funds it needs.

I have not been against anyone taking part in the sukkuk offering. I'd say it's one of the best investment opportunities in the country- to me much better than the NSE and perhaps even real estate.

The CBN gov the other day was talking about creating an investment vehicle to enable institutional cash which is sitting on bank balances to be invested in the real sector. I wonder how he aims to achieve that when bonds are at bonanza rates.

Someone said that in Nigeria, folks only complain of corruption when they don't benefit. To be clear, bonds are very much legal and this is one I could very much benefit from. But does it mean that no one is willing to ask questions about the attendant long-term effects of such high rates once they are beneficiaries?

ositadima1:
First, given the current realities on ground - the weakening exchange rate, 2 digit inflation etc - will you put your money down for the next 10 years or more at 3% or less per annum in Naira? Please, answer me, will you?

You know, the people who organize or set these rates are not illiterates, sometimes we should cut these people in authority some slack, some of them are well educated professionals in their field.

Plus, I don't like to simply compare numbers without thoroughly analysing "the other factors".

Did u compare things like;
1. Inflation rates
2. Currency exchange risks
3. Stability issues
4. Risk of default
5. Interest rates

All of the above and more for d next 10 years or more.

First, you get me wrong on one thing. I'm not critiquing the sukkuk bond as a good investment choice for an individual or not. As a matter of fact, for someone who has slush funds and putting all things together, I'd see it as one of the best investment opportunities currently in the country.
What I don't understand is why a government that spends majority of it's revenue servicing debts is taking on more local debt at such rates when it could easily push rates lower and still get the funds it needs. What the government is doing is rewarding portfolio investors at the expense of the masses.

Besides, 'our leaders know better' has never been the answer to such questions.
Let me give obvious scenarios
Nigeria has comparatively about the lowest minimum wage but still has about the highest earning political class, same nation still has areas where over 80% of kids are not in education, same nation is still struggling to have a functional refinery, same political class are still making an argument for normadic cattle rearing in 2021.
Everything I mentioned are commonsensical issues where the nation has failed at

Where I very well disagree with you is that our 'professionals' in power as I believe they are given too much slack. That slack is part of the reason why our nation is where it is. Imagine hundreds of citizens being killed on the daily by bandits and the answer is our president knows better.

'Our leaders know better' isn't the answer

emmanuelewumi:
You must be the defender of the helpless and the universe.

If you can't beat them, join them provided it is legal or position yourself to harness opportunities as they emerge. That is the essence of Investment forum.

We can talk about the socio-political implications on the political threads of Nairaland

This is an investment thread and I look at all aspects when I do. Like I said previously, I'm not critiquing any person taking up the offer as it is a good one.

My analogy is simple- if my means of building wealth and sending my kids abroad is thru a means whose end result ensures a good number of kids in my community are left uneducated, then it's only a matter of time before I start asking myself if I want to remain in a community that'd have that number of uneducated adults. As we reap the benefits of a suspect government policy, the profits shouldn't blind us from asking those in power the right questions.

Olaide1295:
I was shocked to see smaller African countries with bond return rate of less than 5%.
I think the bond rate in Nigeria is kept high to prevent capital flight. If the rates are low, investors may move to other countries to seek for better rates which will affect exchange rates.
It’s interesting though that since the pension funds are the largest investors, then this may not be valid as there are rules guiding where they can invest in.

The issue of capital flight was one of the reasons we thought TB rates were kept high but this has been shown to be false as even with current TB rates, they're still oversubscribed to a tune of 16x.

One thing is quite clear- the government can fulfill their need for local funds at much lower rates. What no one has answered is why then is a government that spends majority of its revenue servicing loans still offering such rates on bonds when they can afford to push rates lower? It defies logic

EmmanuelScott1:
Welcome back boss, what happened?

Caught up with oda stuff. Also, with the gbagbos going on the thread, I decided to take a break. No good in unnecessary arguments.

ThisisIkemefuna:
BOSS!

Compliments chief.

Gracias my brother

Mazinewmoney:
Greetings boss. Welcome back. I need your analysis on DYP. Defi yield protocol. It's listed in Kucoin. And Xfund

Gracias
Can't say much about it, not one I've traded b4 and I know little on it's tokenomics. It's chart doesn't look pretty either. In current market conditions, I'm just sticking to coyns I've largely been in for a while

MapleBae2020:
Good to have you back. Missed you.

Gracias