Ace2013:
Guys, how secured are these t-bills/govt bonds.
Has any one invested over 10 Million Naira, and got his interest and capital back after the maturity date?

Hope the banks/govt do not come up with stories on the maturity date on how they cannot pay back the capital on the said date/or related stories that hurts?

Lastly, what is the difference between treasury bills and bonds. My basic understanding tells me bonds are debts. Are they issued at a higher rate than t bills?

Guys please i need your input/experiences

Ace2013:
Guys, how secured are these t-bills/govt bonds.
Has any one invested over 10 Million Naira, and got his interest and capital back after the maturity date?

Hope the banks/govt do not come up with stories on the maturity date on how they cannot pay back the capital on the said date/or related stories that hurts?

Lastly, what is the difference between treasury bills and bonds. My basic understanding tells me bonds are debts. Are they issued at a higher rate than t bills?

Guys please i need your input/experiences

sanerugwei:

What if you bid higher than the amount in your account, isn't that better than reinvesting the upfront interest.
Eg. I have 825k, I can decide to bid for 1M because at 18% that 180k interest add transactions costs too, they will just deduct that amount or thereabouts.
On maturity, you get credited 1M.

chukzyfcbb:

don't be faster then your shadow bro,lol
you will need to find out the workings of your bank before trying to outsmart them. As with first bank, the moment you submit your bid request, the money will be debited from your account immediately. if the bid was successful, you get your interest paid upfront.
in this case, if you applied this approach with first bank by placing a bid of 1m when u have just 825k in your account, I am sorry to say it would be declined.
However not all banks debit you immediately you submit your request, which is what you should find out from your bank.
I asked this same question a long time ago because I wanted to outsmart them,lol.
so dnt be faster than your shadow

chukzyfcbb:

don't be faster then your shadow bro,lol
you will need to find out the workings of your bank before trying to outsmart them. As with first bank, the moment you submit your bid request, the money will be debited from your account immediately. if the bid was successful, you get your interest paid upfront.
in this case, if you applied this approach with first bank by placing a bid of 1m when u have just 825k in your account, I am sorry to say it would be declined.
However not all banks debit you immediately you submit your request, which is what you should find out from your bank.
I asked this same question a long time ago because I wanted to outsmart them,lol.
so dnt be faster than your shadow

sanerugwei:


I specifically said this works with GTB.
I do not understand First Bank's rationale for withdrawing the whole amount at first then paying back the upfront interest after the bid.
What do you mean by outsmart, you made it sound like some dubious operation. It isn't.

munezo:
Yes, there is TBills auction this week

sanerugwei:


I specifically said this works with GTB.
I do not understand First Bank's rationale for withdrawing the whole amount at first then paying back the upfront interest after the bid.
What do you mean by outsmart, you made it sound like some dubious operation. It isn't.

chukzyfcbb:

well its not dubious per we, but its you outsmarting them. Writing the amount to be invested in your form as 1million when infact you don't have up to 1million in the account because you know not all is needed is you forming sharp guy. let's take for instance

someone with 40million in his account can place a bid of
50million at a discount rate of 20% for 364days.
now if this rate is successful, it means 20% which is
10million will be paid upfront while his 40million in the account will be debited.

at Maturity he gets back the 50million he indicated he invested plus his 10million upfront interest collected
making a total of 60million!!!
Now that's him using 40m at 20% to get 60million
instead of originally investing his 40m @ 20% to yield a total of 48million
so he outsmarted the system by gaining Awoof 12million
I doubt this would work even at the gtb bank , I strongly doubt it because it will cause the CBN to generate fresh fund immediately to be paid to you as upfront interest instead of just subtracting it from your original invested sum( in the example above, 10m is the fresh fund they will have to generate while taking ur 40m) ......Just doesn't seem right

unite4real:


This is completely false.

If your account has N40 million and you bid to buy TB of N50 million for 364 days at 20%, the entire N40 million is debited from your account and on maturity, N50 million is paid back to your account. There is no smart N10 million anywhere to be added to make the N60 million you talked about. Remember that your account had N40 million. So if you bid for N50 Million at 20%, the N10 million upfront interest didnt remain in your account because your acount initially had N40 million and not N50 million. If your account had 50 Million, then the N10 million upfront interest will be in your account while N40 million is debited.

There is no smart way that 20% yield will give you N60 million from N40 million. That's like saying you got yield of 50%. that is not true.

There are two scenarios here

scenario 1: You had N40 million in your account and you bid for N50 million at 20%. All the N40 million is taken and at the end of maturity, you are paid N50 million. Money moved from N40 million to N50 million. shikena

Scenario 2: You had N50 million in your account and you bid for N50 million TB at 20%. N10 million interest is paid upfront and left in your account while N40 million is debited from your account. On maturity, N50 Million is paid back. If you reinvest your N10 million, you get N2 million extra which brings the total interest to N12 million. Money moved from N50 million to N62 million.

None of these scenarios can make you up your money from N40 million to N60 million.

chukzyfcbb:

thanks for the clarification, I just knee that it just didn't seem right to me. with your clarification now I get the clearer pic, and if others have invested using this style. I will like them to mention the name of the bank they went through. Someone said Gtbank, what other bank?

Lalaska:
Time for Nigerian banks to make a kill. Their opportunity has finally come. You can no longer bid using your own rate. They will now bid high with CBN and bid low with you, thereby making good margin.

I will advise checking the bank you bid with very carefully and ensure you use those that are less heartless (if available at all)

NL1960:


If you have your 50m and above, then you can fix your rate otherwise you will have follow bank rate. It is as simple as that.

unite4real:


This is completely false.

If your account has N40 million and you bid to buy TB of N50 million for 364 days at 20%, the entire N40 million is debited from your account and on maturity, N50 million is paid back to your account. There is no smart N10 million anywhere to be added to make the N60 million you talked about. Remember that your account had N40 million. So if you bid for N50 Million at 20%, the N10 million upfront interest didnt remain in your account because your acount initially had N40 million and not N50 million. If your account had 50 Million, then the N10 million upfront interest will be in your account while N40 million is debited.

There is no smart way that 20% yield will give you N60 million from N40 million. That's like saying you got yield of 50%. that is not true.

There are two scenarios here

scenario 1: You had N40 million in your account and you bid for N50 million at 20%. All the N40 million is taken and at the end of maturity, you are paid N50 million. Money moved from N40 million to N50 million. shikena

Scenario 2: You had N50 million in your account and you bid for N50 million TB at 20%. N10 million interest is paid upfront and left in your account while N40 million is debited from your account. On maturity, N50 Million is paid back. If you reinvest your N10 million, you get N2 million extra which brings the total interest to N12 million. Money moved from N50 million to N62 million.

None of these scenarios can make you up your money from N40 million to N60 million.

Timmi:
Source: nairametrics.com

MPR: What The Predictors Think Will Happen
news-team Chacha Wabara MARCH 20, 2017

Nairametrics| Financial experts are predicting that the Monetary Policy Committee of the Central Bank of Nigeria (CBN) is unlikely to change any of the key rates after its 2-day meeting which commenced this morning. Some of these predictions are quoted below.

Bismarck Rewane, Chief Executive Officer, Financial Derivatives Company Limited.

My projection is that they will do nothing; they will just wait and see. If I was there, I would get the interest rate down by one per cent, bring the CRR down by two per cent and putting more money into the foreign exchange market. That will be a major catalyst for economic activities. However, I think the prudent and safe thing that we should expect is that there will be no change for now. Bringing down interest rate has a risk element.-
Johnson Chukwu, Chief Executive Officer, Cowry Asset Management Limited.

I don’t expect the MPC to adjust the rates because the monetary authority will not want to inject naira liquidity into the economy at this point when they are succeeding in stabilising the naira exchange rate. I do not expect the monetary authority to react to the decline in inflation in February at this particular meeting. That, we expect, will happen probably at the May meeting when inflation would have gone down further and at that point, the naira exchange rate would have been better stabilised.-
Also on Smooth FM this morning, ARM predicted that rate will remain at 14% and did not see any need for a rate hike or a drop.

If these predictions turn out to be correct, it would be similar to the outcome of the January meeting where the Monetary Policy Rate (benchmark interest rate), Cash Reserves Ratio and Liquidity Ratio were retained at 14 per cent, 22.5 per cent and 30 per cent, respectively.

Whatever the outcome though, we expect that it would be agreeable to both monetary and fiscal policy makers, who have just concluded a meeting over harmonization of economic policies. The meeting was attended by economic management leaders from the CBN and the Ministries of Finance, Budget and National Planning as well as Industry, Trade and Investment. This was in an effort to prevent contradictory actions that could stagnate the economic revival of the country.

chukzyfcbb:

well its not dubious per we, but its you outsmarting them. Writing the amount to be invested in your form as 1million when infact you don't have up to 1million in the account because you know not all is needed is you forming sharp guy. let's take for instance

someone with 40million in his account can place a bid of
50million at a discount rate of 20% for 364days.
now if this rate is successful, it means 20% which is
10million will be paid upfront while his 40million in the account will be debited.

at Maturity he gets back the 50million he indicated he invested plus his 10million upfront interest collected
making a total of 60million!!!
Now that's him using 40m at 20% to get 60million
instead of originally investing his 40m @ 20% to yield a total of 48million
so he outsmarted the system by gaining Awoof 12million
I doubt this would work even at the gtb bank , I strongly doubt it because it will cause the CBN to generate fresh fund immediately to be paid to you as upfront interest instead of just subtracting it from your original invested sum( in the example above, 10m is the fresh fund they will have to generate while taking ur 40m) ......Just doesn't seem right

unite4real:


This is completely false.

If your account has N40 million and you bid to buy TB of N50 million for 364 days at 20%, the entire N40 million is debited from your account and on maturity, N50 million is paid back to your account. There is no smart N10 million anywhere to be added to make the N60 million you talked about. Remember that your account had N40 million. So if you bid for N50 Million at 20%, the N10 million upfront interest didnt remain in your account because your acount initially had N40 million and not N50 million. If your account had 50 Million, then the N10 million upfront interest will be in your account while N40 million is debited.

There is no smart way that 20% yield will give you N60 million from N40 million. That's like saying you got yield of 50%. that is not true.

There are two scenarios here

scenario 1: You had N40 million in your account and you bid for N50 million at 20%. All the N40 million is taken and at the end of maturity, you are paid N50 million. Money moved from N40 million to N50 million. shikena

Scenario 2: You had N50 million in your account and you bid for N50 million TB at 20%. N10 million interest is paid upfront and left in your account while N40 million is debited from your account. On maturity, N50 Million is paid back. If you reinvest your N10 million, you get N2 million extra which brings the total interest to N12 million. Money moved from N50 million to N62 million.

None of these scenarios can make you up your money from N40 million to N60 million.

battleaxe:
You do not determine a rate with the secondary market.

Your bank typically will tell you the tenors and rates they have available, and you can then make a selection.

If you specify a rate and none is available at that tenor or rate, then yes they would keep rejecting your forms. You cannot bid on the secondary market- just buy whatever is available.

Rizin:


Thank you. Na ur kind of person, if not u, de work for gtb.

u will always advice to invest all.

this can even make somebody to invest his house rent or even children's school fees.

@All please note that landlord or these schools can not wait 1yr for maturity.

Rizin:



Thank you. Na your kind of person if not u, dey work for first bank.
They will always advice that you invest on fixed deposit @3.25% pa as against 18.5% in TB

If i have 50m and sign fin for 50m, you will return 10m to my account and use it to run your packages at the bank while i wait for the maturity of the other.
If i have 40m and sign in for 50m, u will return my 40m and out of frustrations, i will leave the money in the account while u use it to run ur packages at the bank.

how on earth can somebody invest 40m at 20% and the person gets 60m. even if the calculator is faulty.

Rizin:


Thank you. Na ur kind of person, if not u, de work for gtb.

u will always advice to invest all.

this can even make somebody to invest his house rent or even children's school fees.

@All please note that landlord or these schools can not wait 1yr for maturity.

unite4real:


myopic thought.

I am sure you understand multiple income stream and cash flow. The fact that we were analysing the use of all money in an account did not mean all the money from all other accounts including statutory fees.

Who is talking of investing house rent and skool fees. are we talking about mmm here?

I am glad my coupons from FGN Bonds pays my rent and children's school fees annually with left over to be reinjected.