₦airaland Forum

pluto09:
The decision to devalue the naira has little to do with rationality....
The major determinant is oil price....if oil price is low CBN will have no option than to devalue the naira

aremso:
https://dailytimes.ng/2020/02/14/cbn-may-devalue-the-naira-in-2020-analysts/?utm_term=Autofeed&utm_medium=Social&utm_source=Facebook&fbclid=IwAR1YcLlA9apodkzl7cmQMS2f0XrKmXPpaaDMt4kApFTDOfdH_VTZDfh3jtM#Echobox=1581912418

zohan101:
Thanks for your explanation Sir.

But please Can one roll over interest plus capital in bond investments just like it is with treasury bills?

TotoNaRubber:
Bonds seems like a legal 419, you buy to make profit but the banks makes more money when you are buying and when you are selling.

The units thing is complicated, the interest rate is complicated, you won't really know when banks try to cheat you, sometimes you get paid 16% and sometimes you get paid 12%.

When you buy from sec market, you have to pay the seller some interests, is there anyone who has held bond to maturity to explain if it was worth it?

igbizen:
This scenario you just narrated implies that you can only lose ur capital if you sell b4 maturity. As long as you hold till maturity you won’t lose your capital.

TotoNaRubber:
Thanks for the explanation, what I understand is that the new buyer will pay more to obtain the bond and then still earn less in Interest payments, at the end of the day, the real interest payments for a two year bond could be 10.5%.

What do you think?

TotoNaRubber:
Hi,
I have a few questions;

1. How do you calculate the yield on bonds. There is a quote 16.39% coupon and yield of 12.06. What does that mean pls?

2. Are the interests based on 16.39% or 12.06%?

3. After investing when do you start receiving coupon payments.

4. Do you need to open an account to invest in bonds?

Acidosis:
I think he's supposed to consider the inflation rate for 2020 (maturity date), not 2019 (value date). Short-term tenors are exemptions though.

speedyconnect3:
[b][/b]


I need to understand this please.
See this scenario.


If inflation rate is 12% this year and in 2019 its 14%. That's 2% rise.


If I do t bills at 15% in 2019, does it mean that I gained 13% because of 2% rise. Or that I gained 1% because inflation is 14% in 2019.


Gonfreecss1

Feelamong
Ahiboilandgas
Nl1960
Zamirikpo
Acidosis
Realityshot
Et al

Infinitisi:
Bottom line for everyone I think should be it is important to invest your time and money in financial and economic education.

There are many online courses on investing and portfolio management which will teach you the different asset classes, interest rates, inflation, currency devaluation and how all these factors affect investment decisions and how to properly allocate your funds among different asset classes.

More often than not what separates the successful investors from the rest are education and experience. At least you have control over how much education you get.

Biakwa:
Please what is the current TB rate?

jpphilips:
It is not as straight forward as it sounds, the US once dropped 13% crude import from Nigeria few years ago but India picked it up during the Iranian sanctions. India is equally benefiting from the US-Iranian oil embargo wavier, so it is unclear if India will remain the "go to guy" this time around.
As a result of increased population, robust transportation networks & industrialization, demand for oil increases in countries like China and EU. If Nigeria doesn't sell crude oil (very unlikely), all the effects of crude oil shock as experienced in 2016 will return including spike in TB rates, Buhari's $42b savings wont hold off the forex deficit forever.

The good news will be Dangote refinery, coming upstream in Q4 2019 and other big refinery projects world over especially those in Asia and middle east, for now, there are no growing fears of Nigeria's oil export capacity, what you should worry about is crude price, think about it, with the US at 11mbopd and Saudi unwilling to rally OPEC to cut down production worse still increasing her output, crude price is likely gonna crash in coming months which will strike a blow to Nigeria's finances especially during this election period.

Pressure from low crude price, elections expenditure, new minimum wage will likely spike inflation, since August, inflation has increased from 11.23% to 11.28% feared to peak at 12.4%, TB rates will continue going higher till next year especially for the long term 364 tenure.

Yem0350:
Money market rate is tax free

silentone:
Please house, I need your advice. I went to stanbic today to enquire about TBills and Money Market cause I wanted to invest 500k. After telling me the rates, the account officer advised me to opt in for money market. Saying it would be a smart choice as to TBills.
The rate for TB at primary market was:
91 days-10.75
182- 13.47
365-14.0
While Money market is 11.54%
Please, what option do I opt in for as am a newbie in this.

eagleeye2:
I will rather hedge my funds against inflation by, having a domiciliary account and buying dollars with it. As far as safe investments goes, T.bills is about the safest out there. If I want to diversify, I can do equities and real estate.

katamo:
First of all, you will be hard pressed to get a loan at 2% annual interest rate. It is more likely to be in the high single digits.

In any case, as others have pointed out, you will be exposed to exchange rate risk. So if the naira per dollar/euro exchange rate moves against you (that is, if it goes up) by the time your T-bills mature, you will be exchanging the same amount of naira for less dollars/euros. With the recent increase in interest rates in the US and other countries, investments in those countries are becoming more attractive to foreign investors who have been invested in the Nigerian market and you can see this in the increase in investment outflows over the last couple of months. The Nigerian government has been using foreign reserves to intervene in the forex market to keep the naira stable over the last few months - hence the trend of decreasing foreign reserves. What you propose looks to me like a risky strategy in the current environment particularly if oil prices decrease which will impact our ability to replenish our foreign reserves which we are using to keep the exchange rate stable.

Ugoh11:
Something you can do is buy dollar futures (which is buying dollars at a particular rate in the future) to hedge against fx risk..
so if you wanted to invest 1000000 naira in the 364 Tbills at say 14%. You will buy dollar futures for the equivalent of what you expect from your investment which is your principal * 1.14 sobthat when it matures you pay for the dollar at the futures rate hence shielding you from the fx risk..
what I don’t know is if your local bank or local banks sell futures to individuals...

TheSam:
Good day All, please is it a good idea to obtain foreign loan at 2% annual interest to invest in Tbills since interest rate is usually 10%-13%? I need candid advise so I can weigh the pros and cons.

michellez:
I was told same at GTBank today so i already gave instructions for the bid.

katamo:
I agree with feelamong and TONY56 and will add some additional thoughts.

The Nigerian government issued a large amount of TB over the last couple of years to support increased government spending which was mechanism to stimulate the economy and bring us out of recession. Since oil prices were low, government had to issue a mix of TB bills (which were very costly at about 17-18% interest) and Eurobonds (much cheaper at about 7%). Now that the price of oil has started to recover (which translates into more money for the government) and the economy is technically out of recession, government will look to phase out high-cost TB borrowings by reducing the amount issued/rolled over.

If these economic indicators continue to be positive, we can expect to see TB rates continue to go down. Investors are trying to lock in higher rates now for a longer term (364 days) as TB rates are expected to continue to decrease in the near term. I personally see rates falling below 10% (for 364 days bills) sometime this year, all things being equal.

dipoolowoo:
T-Bills Market Trades Bullish as Money Market Rates Stay Stable
https://www.businesspost.ng/2018/04/17/t-bills-market-trades-bullish-as-money-market-rates-stay-stable/

awesomeJ:
Should be the whole.

But if the funds are substantial, say above 100m, your bankers may be able to work something out.

Still reach out to them for confirmation though.

Happy Sunday to everyone.

Rubbiish:
Steel portal frame structure will be best for the purpose your building is meant for.
@bold You don't need Julius berger to do it, any of our credible NL engineers or architects can do it.
But if the location is around Abuja axis, i can recommend someone that has done something similar for friend in 2016. A fruit processing facility. All i know about portal frame was through him.

Rubbiish:
I will advise u to go for portal frame sir

EgunMogaji:
You're welcome.

I recommend Darenyx and I'm a twice paying customer.

If he defaults on any transaction with you I will pay you back. My stock in him is that high.

Good luck on your project.

EgunMogaji:
Try this Architect Nairaland.Com/Darenyx

He did similar on this thread https://www.nairaland.com/4353930/building-lagos-warehouse-temporary-structure/1