₦airaland Forum

Shalom428:
Today's rate

Offer
This refers to the total amount of Treasury Bills being made available for sale by the Central Bank of Nigeria (CBN) during an auction. The CBN issues NTBs to raise funds and manage liquidity in the economy.

Subscription
This represents the total amount of money investors (individuals, corporations, and institutions) bid to invest in Treasury Bills during an auction. The subscription amount often exceeds the offer, indicating high demand.

Allotment
The allotment is the portion of the Treasury Bills that is assigned or allocated to investors after the auction. The CBN decides how much of the bid is allotted to each investor based on the bids submitted and the available offer.

Range of Bid Rates
This refers to the spectrum of interest rates (yields) submitted by investors during an auction. Investors propose these rates when bidding for Treasury Bills, and they typically range from low to high based on market expectations.

Previous Stop Rates
The stop rate from the last Treasury Bill auction. The stop rate is the highest accepted bid rate at which the Treasury Bills are allotted. Comparing the previous stop rates to the current ones helps gauge changes in market conditions.

Current Stop Rates
The stop rate for the ongoing auction. It is the highest rate at which the CBN accepts bids for Treasury Bills in the current auction. This rate determines the return investors will receive.

Change
This is the difference between the previous stop rates and the current stop rates. It indicates whether the yields on Treasury Bills are increasing or decreasing, reflecting shifts in monetary policy, inflation, or investor sentiment.

True Yield/Return
This is the actual return an investor will earn on a Treasury Bill, accounting for the discount at purchase and the face value at maturity. The true yield factors in the holding period and is expressed as an annualized percentage return.

Adamma91:
Why not just do 360 days at once instead of roll over 3 times a year

BizErikah:
I thought about that but I calculated the yield and the 3x is more than the 1 time 360 days yield

BizErikah:
I thought about that but I calculated the yield and the 3x is more than the 1 time 360 days yield

skyangel:
It doesn't work that way, all rate is calculated per annum, meaning that 18% for 3 months is divided into 4
For instance, when you investment 1 million for 3 months at 18%, your interest will be 180,000 ➗ by 4 = 45,000

BizErikah:
Oh wow
So by 360 days is it still divided by 4?

SmartNYSC:
Thanks for sharing.

Can anyone please explain to a layman meaning of each of the metrics or terms?🙏🏽

Modified: I got this from ChatGPT. Kindly point out error from it.


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Shalom428:
For those that missed this week's TBills, there is another one next week. Key in on Monday or latest on Tuesday.

Shalom

Francis8999:
Good evening, please which commercial bank gives the best interest rate on savings account? I don’t want MFBs. Thanks.

freeman67:
Their platform seems to be automated ooo. It's like you will have to put in the market for sell yourself and the way things are right now, you could generate loss from there...

ositadima1:
Let’s assume you have ₦1 million to invest. Your bank gives you ₦230,000 upfront, which is 23% of ₦1 million, a few days after you invest in treasury bills. This means you effectively invested ₦770,000, calculated as ₦1 million minus ₦230,000. It is the ₦770,000 that remains invested for one year, not the full ₦1 million.

At the end of the year, upon liquidation, you receive ₦1 million, which is the initial ₦770,000 plus extra ₦230,000. Therefore, your true yield is ₦230,000 divided by the ₦770,000 you effectively invested, giving you an effective return of 29.87%.

Do you now understand that you effectively invested ₦770,000, not ₦1 million, because ₦230,000 was paid back to you at the start of the investment, exactly one year before maturity?


You are being rewarded for giving them access to your money for the year. What matters is the portion of your money that remains with them throughout the period, as that is what generates the interest. The portion that is given and then returned to you at the start does not contribute to the interest, though it is necessary to complete the transaction from your end.


Can you reinvest the upfront 230k?

ositadima1:
Let’s assume you have ₦1 million to invest. Your bank gives you ₦230,000 upfront, which is 23% of ₦1 million, a few days after you invest in treasury bills. This means you effectively invested ₦770,000, calculated as ₦1 million minus ₦230,000. It is the ₦770,000 that remains invested for one year, not the full ₦1 million.

At the end of the year, upon liquidation, you receive ₦1 million, which is the initial ₦770,000 plus extra ₦230,000. Therefore, your true yield is ₦230,000 divided by the ₦770,000 you effectively invested, giving you an effective return of 29.87%.

Do you now understand that you effectively invested ₦770,000, not ₦1 million, because ₦230,000 was paid back to you at the start of the investment, exactly one year before maturity?


You are being rewarded for giving them access to your money for the year. What matters is the portion of your money that remains with them throughout the period, as that is what generates the interest. The portion that is given and then returned to you at the start does not contribute to the interest, though it is necessary to complete the transaction from your end.

Acidosis:
Right.. After several attempts, I realise I could do everything on the app within few seconds. Few minutes after I applied to terminate, a staff called to confirm my application.

talk2tonie:
Hi Guys,

I need some help - Today, I bought Tbills from GTB secondary market and I was charge 10,272 for custody fee and another 770 vat fee. This fees are new to me as I usually buy from primary market and never heard of this fee.

Is this something new now? Has anyone here used GTB and experience this fee deduction?

Any reply would be highly appreciated.
Thanks guys!

Sequential123:
Please at what discount rate did you buy the secondary TB.

talk2tonie:
Hi Guys,

I need some help - Today, I bought Tbills from GTB secondary market and I was charge 10,272 for custody fee and another 770 vat fee. This fees are new to me as I usually buy from primary market and never heard of this fee.

Is this something new now? Has anyone here used GTB and experience this fee deduction?

Any reply would be highly appreciated.
Thanks guys!

Itsrm:
Those fees are charged whether it's primary or secondary market. You may not have noticed or it wasn't communicated to you.

talk2tonie:
364 days /21.5%

ernie4life:
Do you have Tbills calendar?

oluayebenz:
I recommend Gtb, they are really trying in that aspect

legacystore:
Dollar speculators crying already

Hopefully it continues to fall

RayRay06677:
Dollar will rise.

jedisco:
The time has come to tread carefully on this.

There has been some macro changes I'd list below.

1. The naira has been free floated with significant less room to roundtrip. This way the effect of market forces would be more evident

2. Dangote refinery. Imported pretroleum products was our biggest need for forex and the last govt awarding him cheap usd helped get us in this state. However, the refinery is finally up and running and sourcing most crude locally plus then exporting finished products is a game changer. Of couse he has usd loans which he would pay back but these should be more favourable than importation.

3. Ending petrol subsidy- This has brought significant hardship but at same time dampened local petrol usage and smuggling. The previous method gave room to corruption and the govt spent huge amts of forex to forestall this. Worth noting that reduced energy is generally not good for growth.

4. Due to inflation, collapsed naira and all three above, the buying power of the populace has sadly reduced with many manufacturers looking for local alternatives where they can. i.e less appetite for imported goods.

5. Diasporean inflows- A major forex generator for the nation which the CBN has recently successfully been able to streamline. I know this as a few years ago, those looking to send in money would be advertising and exchanging details on WhatsApp or doing so via crypt0 channels due to high fees from the likes of Western Union or the govt insisting only usd can be received locally or the failed Naira4Dollar scheme. Now, there are very good apps which are licenced almost immediate. I believe the forex eventually streams to the govt coffers.

I believe the next major hurdle is fighting inflation tied in with reckless money printing. The CBN seems to be actively looking to address this. It remains to be seen the effect of the new minimum wage.

I was in Nigeria recently and surprised how 'relatively cheap' items have become due to the currency collapse. I think we are at or close to the bottom of this nightmare and soon at a stage where local investments may begin to yeild real returns. I am not rushing in but biding my time. The next 6-12 months should be crucial. If the Naira can keep ranging (1500 -1900) and resists further devaluation, market confidence should gradually return. I'm not looking to catch the bottom but would be keen to step in once things are heading upward

P.S as you may know, I have longed preached folks should defend their buying power and was at the forefront of warning folks to hedge their naira holdings against devluation over the last few years. Even beofre the current govt when I was quite sure the local stock market was due a rally and stated that here, I opted not to invest as I felt estimated returns in Naira might not beat corresponding investments in usd which has proven been the case. Its still worth being hedged so you don't get swept off your feet by a rubbish govt policy but to me, times has come to start paying attention.

Jega2000:
can you reinvest the upfront 230k?