Suspect the spread between the 182 and 364 days NTB stop rates may continue to shrink over the next few months.

LauraClasikVibe:
rates are dropping, what's the implication(s)?

I have rested.

Nakedman:

Oga rest.

Noted. Sorry. In hindsight it was a simple question you asked. My bank sends it to me when I ask them for it. I do not ask for it following every NTB auction. I asked for it because it was asked for by another user as well as yourself yesterday and no one responded. So I asked for it this morning. It is posted again below.

LagosInter:


I wasn't doubting you. I only wanted to know if it's something I can access myself maybe from time to time.

The info was useful.

That's why I asked where it could be found.

Take the info you need from it. I will not post NTB auction results again. The auction results information can be obtained from your bank or broker if you ask nicely. Will delete my post above to affirm my position.

LagosInter:


Where did you find this pls?

Kindly ask your bank or broker for NTB auction results.

efismikoko:
Please anyone with the result of yesterday thanks

Is the below quote by Peter Lynch a sarcastic quote?

This Wednesday 14 July 2021.

LagosInter:
When is the next tbills auction?

Tbills rates are falling though?

Kindly note that these require a minimum of N50.001m to subscribe.

emmanuelewumi:
Bond time table for this quarter

emmanuelewumi:



Move out keh.

High demand at the long end (364 days). N59b offered vs N436b subscription.... with N158b allotted... No surprise that the rate dropped.

Zobah:
What the reason for the drop?

Ever so true. Seconded.

DaBogu:
You never get a look behind the scenes... truth is the real winners are silent and doing their own thing. Don’t get it twisted. The loud ones tend to be (but not always) pretending to be better than they’re doing. You can tell by how they carry themselves.

Last stop rates may be a guide. The next auction appears to be tomorrow 1 July, 2021.

Samunto:
What is the current TB rate ? and when is the next auction date. Someone should please help.

Correct.

emmanuelewumi:



Then the liquid assets should be equivalent to your annual expenses for more 30 years to give room for inflation

Another reason I don't pay attention to or focus on networth (total assets less total liabilities) is that in most instances networth is not readily available as cash. I prefer to focus on liquidity most of the time. Networth I think is on the whole a matter for my Will or Trust. Networth really plays no part in my everyday life. Networth I find is useful when people are trying to raise debt for whatever reason. I have spent a good part of my life time paying down debt so I do not envisage raising any debt going forward.

Btw I am not disagreeing with your initial statements. I am simply stating that it is not something I focus on or even think about. It will all (networth) simply be listed in a Trust and Will.

emmanuelewumi:



Your networth is the total value of everything you own eg house, savings, retirement savings account, bonds, mutual funds, cars, collectibles, business, shares, real estate, life insurance etc minus your liabilities eg student loans, pre payment received, car loan, mortgage loan etc.

True my current annual expenses are less than half of my passive income. I still aim to have three times my annual expenses because it allows one to compound some of the passive income to enable it grow over time.

Re sources of current passive income are equity dividends, FGN bonds and three rental flats.

Yes you are right that the emergency reserve can technically count as part of networth. But in my mind I expect to spend it when the need arises or when the time comes. So I personally do not count it as networth (I am quite certain I will spend it e.g. I could wake up one day and say I am off to the Caribbean or Hawaii for 6 months holiday - that's my idea of a lovely EMERGENCY). Networth is not a concept I pay attention to because it can fluctuate widely over time particularly if much of your networth is held in equities. I imagine if majority of ones assets were held in real estate one could mentally keep a note of their networth which isn't the case with me. I do not have majority of my assets in real estate just a bit excluding my home of course.

emmanuelewumi:



That is why number 2 is or, not and.


What are the sources of these passive incomes?

I am sure your annual expenses is 50% or less of your annual income.

Emergency reserve is part of the networth

Agree on the whole with the combination of both statements. However I am not bothered about networth as long as I have 2 years expenses as an emergency fund and a passive income that is three times my annual expenses. That will do me just fine

emmanuelewumi:
Personal finance experts believe you are financially independent if you have the following

1. An emergency reserve that is equivalent to your expenses for a minimum of 6 months

2. A networth that is 30 times of your annual expenses or an annual passive income that is twice your annual expenses.


Do you agree with this?

And when does the bond mature?

PresidentBuhari:
It was bought through bank. It's two payments a year i.e roughly N264k a year.
I don't have the contract note but information recorded at the time of purchase was;
YIELD - 10.93
CLEAN PRICE - 1102.6
DIRTY PRICE - 1156.4

Good morning. Yes the coupon is paid twice a year. The only FGN bond currently available on the secondary market with a 16.39% coupon matures on 27 Jan 2022. It was issued on 27 Jan 2012 (ten year bond). With a 16.39% coupon and N264k interest payment per year means the face value of the bond he bought is N1,610,738 (N264,000/16.38%). Thus, the N1.85m capital spent on the bond purchase includes accrued interest and the bond price premium of at least N6 over par.

emmanuelewumi:



He said bi-annual coupon and not annual coupon.

Meaning he will get the stated coupon twice in a year

With a coupon of 16.39%, then it is most likely your bought the FGN bond maturing on 27 January 2022. Therefore you bought above par and the capital you state below of N1.85m includes includes accrued interest to the date you made your purchase so it is perfectly normal. Kindly note that you get the accrued interest back at the first semi-annual date of the bond following your purchase which would be next month. Finally, it is not expensive since the yield of about 7.4% if bought recently perfectly reflects the short duration to maturity of about 7 months.

PresidentBuhari:
Could anyone help calculate this.
I bought FGN Bond with a coupon of 16.39%.
The capital was N1,850,000 with bi-annual coupon payments of N132,000.

I was informed the capital to be received at the end of the tenure is N1,585,000.

Is this normal or an expensive bond?

Correct and on point.

Lazyyouth4u:


Whether you buy at premium, par or discount , just try to get the highest ‘yield’ possible (note I didn’t say ‘coupon’)

Yield = coupon divided by the amount you paid for the bond

Correct this is why I also said 15% as an average over a 30 year period is a big ask but not impossible if you are in a position to take advantage of periods of market price dislocations (bonds or shares). As a result, compounding the interest of the coupon payments is possible with discipline. Very similar to the discipline required when reinvesting declared company dividends. This is what I have done so far. It is also why I think my 20 to 25 year bond purchase next year will be made using the coupons and dividends I expect over the next 12 months.

ojesymsym:
But it is almost impossible to reinvest your bond interest within the bond itself, or am I missing something?

Life is a journey and an investment portfolio that will be useful in future takes time to build. The beauty of this thread, I feel, is how over the years it has grown from being a TBill only discussion thread to one encompassing and discussing all or most asset classes (Nigerian shares, US shares, FX, real estate, REITs, Eurobonds etc etc). They all have an underlying theme. They are income generating and encourage us all to invest during our active years to make all our lives more comfortable in future in whichever way we choose to live our lives (long life allowing of course). I am not suggesting one does not live as comfortably as one can today or during our active lives, I am merely pointing out that it gladdens me to see how this thread has over the years made more people become aware of some of the benefits of investing.

The above said, the healthy discussions over different investing strategies (short-term, mid or long-term) are great although I do think it can all be had without insulting anyone with the exception of great sarcasm. I find great sarcasm healthy for the soul just as laughter is.

You now get the general idea with the slight clarification below in the second paragraph.

ojesymsym:
Oh I see what you mean. On the bond side using the 15% lot, at the end of the 20th year, the 1M will have yielded 1M + 12.2993M. - Correct

Then the coupons or interest themselves would yield another 1.8M if it is invested in other instruments that are able to also provide same investment interest rate.
Not quite. The 1.8M is compounded interest of the coupon payment interest by the 20th year

Sure. Kindly find below two lots. One using 12% which is about the rate available today for a 30 yrs FGN bond and the other using 15% to enable an easier comparison to the 15% used previously.

ojesymsym:
Is it possible for you to do a case study with say 1 million and maybe 20 years so some of us can better understand?

Currently 15 years. But I am looking to buy a 20 to 25 year one from the secondary market sometime next year. Most probably July next year.

emmanuelewumi:



What is your longest tenor

Well, in this case, I am the lender thus I am not complaining... More happy days ahead

emmanuelewumi:



Compound interest is a 2 edged sword, good for the lender but disastrous to the borrower.

I am a fan of bonds and do have some though I have not bought a 30 year one yet. Nevertheless, yes the coupons over the years have been reinvested in other asset classes (fx, real estate, listed company shares e.g. MTN etc etc). When your principal has been recouped with the bond coupons the remaining years is jara... if held to maturity!

emmanuelewumi:



It actually took me a very long time, before I could understand the rationale behind some core fixed income investors who buy 30 years bonds.

They are so liquid, that they deploys their cash to buying real estates when are are sure of a minimum rental income yield of 10%

Confirmed below (compounded) but 15% is a tall ask to then be the average return on the N9m annually received for the next 29 years though one has stopped at 20 years in the table below.

emmanuelewumi:



From my calculation, N9 million every year for the next 20 years @15% grew to N1 billion.

I stopped calculating, the initial plan was to get the value in 30 years, but had to stop at 20 years.

I want the results from others if they will tally with mine

CBN's 3rd Quarter TBill Calendar.

Meanwhile, the Naira has been appreciating recently against the US dollar. Long may it continue. Amen.

It is not 419. This half of the year has a shorter number of days than the second half of the year (difference is usually 1 or 2 days depending on whether its a leap year or not). This is the reason for the point something percent shortfall.

TotoNaRubber:
do you have a clue why they are short paying everyone?

Shebi CBN don start 419
It's against the contract to pay the investor less than the agreed interest coupon rate.

LagosInter:


Why not also include cost of transport to the bank too?