alezzy13:
Pls anybody, Abeg when is d next auction? I thot it was today

there is Auction Today.

You ought to have dropped your bids with your bankers since yesterday

My friend,
He has told you what he got at the end of the day as his profit and you're saying it's false because you have not taken the trouble to do a deligent calculation.

I will therefore prove to you now that it's not false:

He invested N10,000,000. @17.388% for 364days and got N1,738,800 as his upfront interest before other deductions. He was debited N8,265,963.8, meaning that he got a profit of N1,734,036.2 after deductions.

For terminating it after just 63days and with NO PENAL CHARGES BY STANBIC BANK, it means N1,738,800 ÷ 364days × (364-63)days =N1,437,853.9 was deducted from what he had collected as upfront interest, leaving him with N300,946.1.

Now, selling it @15.6% instead of the 17.388%he bought it because rates have come down now means he is selling it at a profit of 1.788%.

1.788% of N10,000,000 is N178,800.

Therefore his total gain is N300,946.1(for 63days)
+N178,800 (for selling at a profit)
=N479,746.

So my friend, for @whitechocolate to have told us that he made a profit of N460,063.56, he has told us NOTHING BUT THE ABSOLUTE TRUTH and the difference in my calculation and what he said he got MUST be the transaction costs and other sundry charges which is about N19,682.44.


In view of the trouble you have made me to go through to clinically prove that @whitechocolate NEVER LIED, and the fact that you cast aspersions on his person, I humbly demand that you apologise to him and just say thank you to me.
[/quote]

TONY56:



My brother, you have not given sufficient informations for anyone to know if the deduction is "unspeakable".

1.At what rate did you buy at the Primary market?
2 At what rate was it sold at the secondary market?

Since you bought on 4th may, your buying rate should be between 17 & 18.5% depending on your bank.

Let's assume you bought at 17%, it would mean you got about N2,329,000 as upfront interest.

Since you sold 57days before due date, you will be debited N2,329,000 × (57/364) = N364,706.04 for excess earnings. Note that if it was purchased at 18% or more, it will be higher.


The last stop rate for 91days was around 11% and your sale was for only 57days. Let's assume that it was sold at 9%. It means it was sold at a loss of 8% since TB rates has fallen. Then the sale at 9% discount = N13,700,000 × (9/100) × (57/364) = N193,079.67. Which will also be debited to your account. Note also that if it was sold at 10% or higher, this amount will also increase.

The total deductions from your N13,700,000 (excluding bank charges) and assuming that my assumptions are correct which I doubt, = N364,706.04
+N193079.67
=N557,785.7.

So, if the rates you bought the TB last year May is higher than my estimated rate of 17% the deduction will increase. Also, if the rate it was sold at the Secondary market was equally higher than my estimated 9%, it will also increase the deductions further.

You are lucky that your investment was not with Union Bank in which case, you would have equally been debited another 25% of the upfront interest you received.

feelamong:


Not true.....If you understand the workings of Treasury Bills,

You can decide to liquidate before maturity and make money on it..(Capital Appreciation)

This is how banks and discount houses trade Treasury Bills. They dont hold all to maturity!

The trick is to buy when the Yield is high and sell when the yield is low!

Thanks Oga feelamong for this particular post. At least it will help clear the air on this particular issue because we have tried to discuss it without a reasonable conclusion. Since you don abandon us for here... Some of us here have the believe that anything that make you terminate before maturity you must loose money. At least this post will help us see that it is dependent on rate gotten from auction and rate sold afterwards.

Could you please reconcile both emboldened parts above @ tony56?




In other words, If I buy TB at 18% and terminate when rates are 10%

Am I selling at a loss or profit?


What necessitated this is Alakwa's issue.
I am really interested in knowing how he invested 13.7 m when rates are probably at 17% and now terminated when rates have fallen and he still lost his CAPITAL not just a fraction of his interest.


Is there really any permutation that can make that possible?


cc

Awesomej
investnow2017
feelamong


Note that I am not arguing. I am just curious please.
Thanks.

feelamong:


Not true.....If you understand the workings of Treasury Bills,

You can decide to liquidate before maturity and make money on it..(Capital Appreciation)

This is how banks and discount houses trade Treasury Bills. They dont hold all to maturity!

The trick is to buy when the Yield is high and sell when the yield is low!

Does this means that somebody like me that bought when it was 18% will make a profit if i decide to terminate now?.

feelamong:


Not true.....If you understand the workings of Treasury Bills,

You can decide to liquidate before maturity and make money on it..(Capital Appreciation)

This is how banks and discount houses trade Treasury Bills. They dont hold all to maturity!

The trick is to buy when the Yield is high and sell when the yield is low!

.He actually bought high and sold low..

So how come he lost part of his capital?


My sis bought at 17.5 with Access Bank last August and terminated Dec 18, got his full capital with profit..

That's why Alakwa's case is troubling me.

NL1960:


Does this means that somebody like me that bought when it was 18% will make a profit if i decide to terminate now?.

Yes you will make money (Capital Appreciation) Just make sure you know the yield at which the TBills is being sold for you.

These bankers can be very vicious once they sence that you do not understand the workings

Partnerbiz:
Could you please reconcile both emboldened parts above @ tony56?




In other words, If I buy TB at 18% and terminate when rates are 10%

Am I selling at a loss or profit?


What necessitated this is Alakwa's issue.
I am really interested in knowing how he invested 13.7 m when rates are probably at 17% and now terminated when rates have fallen and he still lost his CAPITAL not just a fraction of his interest.


Is there really any permutation that can make that possible?


cc

Awesomej
investnow2017
feelamong


Note that I am not arguing. I am just curious please.
Thanks.

With the amount of info we have on the Alakwa transaction, it appears GTB attempted to rediscount his papers at about 30%, which is why there's being a loss.

ONE THING I CAN CONFIRM TO THE HOUSE FROM OBSERVATIONS NOW IS THAT, STANBIC IS NOT ONLY BAE WITH RATES, THEY ARE ALSO SUPER GREAT WITH PREMATURE LIQUIDATION, AS THEY WILL MOST TIMES REDISCOUNT YOUR BILLS AT CLOSE TO THE PREVAILING RATES.

If you bought through Stanbic at 18% and you want to short sell now, you could make as much as an extra 4% profit off the transaction.

If you give the details of the original transaction, we here can give you a close guess of what the termination proceeds would be.

Early termination shouldn't always be regretted, it's part of the money making gimmicks of this trade.

Partnerbiz:

.He actually bought high and sold low..

So how come he lost part of his capital?


My sis bought at 17.5 with Access Bank last August and terminated Dec 18, got his full capital with profit..

That's why Alakwa's case is troubling me.

It's actually not possible for him to lose even a kobo out of his capital.

I guess he forgot that he already collected over 2m last year as upfront interest. It's part of the upfront interest that he collected in May 2017 that was deducted from his expected discounted amount

TONY56:



It's actually not possible for him to lose even a kobo out of his capital.

I guess he forgot that he already collected over 2m last year as upfront interest. It's part of the upfront interest that he collected in May 2017 that was deducted from his expected discounted amount

If what left his account last year was 13.7m say at 17% then the face value is around 16m hence he should be credited with around 16m upon termination this year.

But the impression he gave, prima facie suggests that 13.7m left his account and now he was credited with 13.058m.


And he cried of losing 600k.
.Thats why I am worried because it's impossible for him to lose his CAPITAL in the circumstances.

cc

Alakwa..

Good afternoon nairalanders..i'm new to TB.. Yesterday I opened an account with STANBIC IBTC bank.. To cut the long story short , I transferred 305k to the acct for TB purpose..the lady gave me the form to fill..I opted for 364 days.. I asked her for the current rate she told me that Cbn has not publish that they will do the bidding when it's out.. So I left the form with her.. Today I logged in with my app and I discovered that m having only 4996 naira.. I didn't see my upfront interest and I don't no the rate she used ..what should I do tomorrow when I get to the bank?

Iammelvin:
Good afternoon nairalanders..i'm new to TB.. Yesterday I opened an account with STANBIC IBTC bank.. To cut the long story short , I transferred 305k to the acct for TB purpose..the lady gave me the form to fill..I opted for 364 days.. I asked her for the current rate she told me that Cbn has not publish that they will do the bidding when it's out.. So I left the form with her.. Today I logged in with my app and I discovered that m having only 4996 naira.. I didn't see my upfront interest and I don't no the rate she used ..what should I do tomorrow when I get to the bank?

Simple.. If you have her contact call her and if you don't, you will have to visit her to ask the questions you asked here..

Here is the result from today's Nigerian Treasury Bills Primary Market Auction direct from easykobo


link is here https://www.easykobo.com/News.aspx?id=19944

Iammelvin:
Good afternoon nairalanders..i'm new to TB.. Yesterday I opened an account with STANBIC IBTC bank.. To cut the long story short , I transferred 305k to the acct for TB purpose..the lady gave me the form to fill..I opted for 364 days.. I asked her for the current rate she told me that Cbn has not publish that they will do the bidding when it's out.. So I left the form with her.. Today I logged in with my app and I discovered that m having only 4996 naira.. I didn't see my upfront interest and I don't no the rate she used ..what should I do tomorrow when I get to the bank?

How much did you specify on the form to be used for the364-day TB?.

NL1960:


How much did you specify on the form to be used for the364-day TB?.

300k

freeman67:


Simple.. If you have her contact call her and if you don't, you will have to visit her to ask the questions you asked here..

OK sir

Thank you Sir. I've been looking for this for a few weeks now.

feelamong:
2ND QTR TREASURY BILLS CALENDAR....

Prepare for lower discount rates as the FG is redeeming about N500B matured Tbs..

Iammelvin:
300k

In Stanbic, once you fill their TB form, the amount specified is placed on hold. If the bid fails, the hold is removed and your balance comes back to normal but if it is successful, the hold is removed while the discounted (TB Amount - Upfront Interest) amount is debited from your account.

So you have to wait till tomorrow or Friday to know if your bid was successful as CBN settles on Thursdays.

NL1960:


In Stanbic, once you fill their TB form, the amount specified is placed on hold. If the bid fails, the hold is removed and your balance comes back to normal but if it is successful, the hold is removed while the discounted (TB Amount - Upfront Interest) amount is debited from your account.

So you have to wait till tomorrow or Friday to know if your bid was successful as CBN settles on Thursdays.

Thanks very much.. I Understand now

Partnerbiz:


If what left his account last year was 13.7m say at 17% then the face value is around 16m hence he should be credited with around 16m upon termination this year.

But the impression he gave, prima facie suggests that 13.7m left his account and now he was credited with 13.058m.


And he cried of losing 600k.
.Thats why I am worried because it's impossible for him to lose his CAPITAL in the circumstances.

cc

Alakwa..

The problem with his case is that he was economical with the important informations required for the assessment of his case.

I guess he was referring to the discounted value as N13.7m and not the face value. When he invested the money .on 3rd May 2017, stop rate was about 18.7% so he most likely bought at not less than 18%. Which means that the face value of his investment is around 16.6m.

If that is true, he pocketed about N2.88m as "up front interest" and was still expecting to be paid back his face value of N16.6m when he terminated it 57days before maturity which is not possible.

So if what he is telling us is that he was to sell it at a loss, then that is NOT POSSIBLE. He probably forgot that he got N2.88m in May 2017. What ever he gets from the transaction, he should add it to the upfront interest he collected last year before he can know if he did it at a loss or not.

I think we should forget about his case since we don't have detailed informations about his transaction and moreover, i think he came back here few days after to inform us that eventually cancelled the transaction.

yinka2011:
Here is the result from today's Nigerian Treasury Bills Primary Market Auction direct from easykobo


link is here https://www.easykobo.com/News.aspx?id=19944

Hmmmmmmmmm.
The Nigerian Treasury Bills is getting very interesting now. Today's allocations are some how and very funny.

The CBN offered N9.57Billion for sale, but only N6.21Billion was bidded for and as usual, they were all alloted at a stop rate of 11.75%

For 182days, the CBN offered N47.86Billion for sale but only N12.52Billion was bidded for BUT suprisingly, instead of allotting all the N12.52Billion, CBN alloted only N4Billion at a stop rate of 13.00%.because of my fears last week that if care is not taken, the stop rate for 182days today may be higher than that of 364days. So, if they were to allot the N12.52Billion, then the stop rate for 182days would have been about 14%.which is not allowed.

For 364days tenor, the CBN offered N38.39Billion for sale but a whopping N154.58 was bidded by investors. CBN then moved the shortfall of N3.36Billion from the 90days tenor and N43.86 they refused to sell because the stop rate would be higher than that of 364days if sold and added both to increase their offer for the 364days thereby allotting them N85.50Billion instead of the paltry N38.39Billion they initially intended to sell at a stop rate of 13.185%.

In fact, if not for that intervention by CBN, the stop rate for 364days would have been less than 13% and 182days about 14%

We shall continue to see things are they unfold and like I predicted at the beginning of the year, the first stop rates of the year are very likely going to be the highest for quite a while this year

yinka2011:
Here is the result from today's Nigerian Treasury Bills Primary Market Auction direct from easykobo


link is here https://www.easykobo.com/News.aspx?id=19944

182 days:
47bn offer, 12 bn subscriptions, 4 bn allotment.

91 days: maximum bid rate 11.75%, stop rate 11.75%

What an auction.

I hope for slight improvements next week.

BREAKING: Inflation rate drops to 14.33% in February – NBS http://punchng.com/breaking-inflation-rate-drops-to-14-33-in-february-nbs/.

most banks may miss this auction, drastically​ reduced.

TONY56:
BREAKING: Inflation rate drops to 14.33% in February – NBS http://punchng.com/breaking-inflation-rate-drops-to-14-33-in-february-nbs/.

Oga Tony,.....the rate in which investors are subscribing for 364 days is really very alarming.......Please can you kindly explain the reasons for the oversubscription of 364 days tenure?.....because i don't think it has ever been like this before....

Gavrelino123:

Oga Tony,.....the rate in which investors are subscribing for 364 days is really very alarming.......Please can you kindly explain the reasons for the oversubscription of 364 days tenure?.....because i don't think it has ever been like this before....

when you are convinced that in the long term rates are bound to crash..its better you go in now and lock the good rates you can get for long term Tbills...

Gavrelino123:

Oga Tony,.....the rate in which investors are subscribing for 364 days is really very alarming.......Please can you kindly explain the reasons for the oversubscription of 364 days tenure?.....because i don't think it has ever been like this before....

Hmmmmmmmm.
You see, the oversubscription of 364 days is not unexpected at all. In actual fact, I foresaw it and if you read my post before the very first Treasury Bills auction of this year wherein I forecasted that the first Treasury Bills of the year was very likely to be the highest rate for quite a while. Consequently, I remember advising people to lock in whatever they had for that 1st auction and to date, it's still the highest.

So a lot of investors also saw this too and have been trying to lock in into the 364 days tenor early as the rates generally are more likely to be heading southwards as we are seeing now.

I remember advising you about two weeks ago to go for the secondary market and for the longest tenor you can get but well over 250days and at not less than 13.5% because you are not sure of getting 364 days tenor yesterday and the rate was likely to fall further which came to pass more so since your bank is not Stambic which get their bids closest to the CBN stop rates nor First Bank which usually comes after Stambic and I am happy that you took to the advice and got about 13.5%.

In summary, we are having this serious or massive oversubscription because investors foresee more downward slide of the rates and are rushing to lock in their funds to the longest tenor they can get before it slides below 10% (I pray not o).

Can you imagine that my Bank-Stambic got 13.925% rate for me in the first auction of the year for 182days tenor which incidentally was CBN stop rate and that is the highest so far. I would have gone for the 364day then but I would need the funds in July.

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.

Pls house I want to know if anybody did buy yesterday through gtb.
I submitted an application through gtb but didn't hear anything yet and no debit post on my account

feelamong:


when you are convinced that in the long term rates are bound to crash..its better you go in now and lock the good rates you can get for long term Tbills...

Thanks Boss.....Now I'm enlightened...!!

TONY56:




Hmmmmmmmm.
You see, the oversubscription of 364 days is not unexpected at all. In actual fact, I foresaw it and if you read my post before the very first Treasury Bills auction of this year wherein I forecasted that the first Treasury Bills of the year was very likely to be the highest rate for quite a while. Consequently, I remember advising people to lock in whatever they had for that 1st auction and to date, it's still the highest.

So a lot of investors also saw this too and have been trying to lock in into the 364 days tenor early as the rates generally are more likely to be heading southwards as we are seeing now.

I remember advising you about two weeks ago to go for the secondary market and for the longest tenor you can get but well over 250days and at not less than 13.5% because you are not sure of getting 364 days tenor yesterday and the rate was likely to fall further which came to pass more so since your bank is not Stambic which get their bids closest to the CBN stop rates nor First Bank which usually comes after Stambic and I am happy that you took to the advice and got about 13.5%.

In summary, we are having this serious or massive oversubscription because investors foresee more downward slide of the rates and are rushing to lock in their funds to the longest tenor they can get before it slides below 10% (I pray not o).

Can you imagine that my Bank-Stambic got 13.925% rate for me in the first auction of the year for 182days tenor which incidentally was CBN stop rate and that is the highest so far. I would have gone for the 364day then but I would need the funds in July.

Chief.....your foresight is unmatched.... this is exactly as you have enlightened me in previous....!!
Thanks and God bless....

egbinlomo:
Pls house I want to know if anybody did buy yesterday through gtb.
I submitted an application through gtb but didn't hear anything yet and no debit post on my account

With my experience with GTB,your subscription failed.....
If it's 364days or 182days,your accounting officer will claim that their bid failed;hence, use the falling rate as an excuse...
Kindly go for Secondary market where you will see the rate yourself and choose a tenure closest to 364 days.
The same thing they did to me in the last auction that almost got me frustrated.....thanks to Oga tony and other Professionals who enlightened me....