₦airaland Forum

This is one of the best thread i have seen on nairaland. Infact I bookmarked it. The only page i visit here. I have learnt alot and still learning here.

OakPearl:
I want to assume the officer you spoke with is not sufficiently informed.
There is a N50m minimum requirement for individual investors ONLY FOR THOSE WISHING TO BID AT THEIR OWN RATES.
With this new rule, what is most advisable is that you decide to go with the banks offering the best rates in either the secondary or primary market. Stanbic IBTC, Fidelity and Sterling Bank I think offer some of the best rates.
My advice is that you exercise patience, do your investigation of the banks, and prepare to bid in the next primary market auction 2 weeks from now as today's auction is almost at hand. This is because secondary market rates are lower than that of primary market rates and so what you buy from the secondary market is actually resold to you by the bank who themselves bought at the primary market.

In summary, you can buy Tbills with less than N50m from the primary market, but not at your bid rate. You would have to submit your bid without a rate in total submission to the bank rate.

Happy investing..

Thank you.

Hello,
I am totally new to TB, but i have some basic ideas about it. I sent a mail to my GTB account manager and she told me that the minimum is 50m, and that i will be informed when the secondary bill is available.

Does it mean I cant buy TB now with less than 50m. and when would GTB offer secondary bill, since i dont have 50m to approach CBN?.

Thanks for your response

OakPearl:
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Treasury Bills and FGN bond are different debt financing instruments that serves different purposes.

Whereas FGN bonds can be offered with tenures of between 3-25 years at fixed interest rates, in which you cannot access your capital till the tenure expires, treasury bills have tenures between 91 days and 364 days maximum with changes in interest rates over the period under comparison.

Consequently, you can only reinvest your capital and accummulated interest over the same period for treasury bills.

The delicate part of this approach is that the interest rate is not fixed beyond 364 days and therefore will depend on the rates determined by the Federal Government through the CBN. This makes determining treasury bills rate over a long period beyond your control and hence tricky to predict as we have seen treasury bills rates oscillate between 9% and 18% per annum in the last few years.

Having said that, I can advise that at the current market condition, investing in Treasury Bills pays more as FGN bonds rates are usually more conservative.

I hope this satisfies your curiosity.