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Bonds Investors Hub by beyolah: 10:15pm On May 25, 2018 |
This thread is being created for anything and everything Bonds including FGN Bonds and FGN Savings Bonds. I don't know a lot about it but I'm also looking to invest in bonds...hence,this information gathering quest ![]() Let's move this thread forward by sharing the how-to, tips, tricks and rates of bonds. Thank you Cc Gavrelino123 confluence awesomeJ Liljel ahiboilandgas ImperialCovfefe spenca 5 Likes 3 Shares |
Re: Bonds Investors Hub by Gavrelino123: 10:50pm On May 25, 2018 |
beyolah:This is a good one. |
Re: Bonds Investors Hub by beyolah: 10:50pm On May 25, 2018 |
A compilation..... *feeddhung: Also, i have never invested in bonds, how or where do we get that? What is the current rate please? ahiboilandgas: Go to bank it around 13.8 now it was 15.54 b4 u get coupon payment bi annually for it duration some can be 10 years u don turn federal govt worker be that. *Gavrelino123: lol...."federal government worker".. Also,memember that it's a minimum of 50Million. ahiboilandgas: no is for bond ....as little as 10 k for saving bond which coupons is paid .every 3 month .....50 m is for biding direct in primary market of treasury bills...bond give more stable income over time cos u can lock fund at 16.5 last year for 5 years ....the rate don't change(interest paid) till maturity ...but there is risk of other instruments going up and leaving u at 16.5 but u can trade ur bond too *ImperialCovfefe: Bro, Have you actually purchased an FGN (not savings) bond recently (after April 2017)? ahiboilandgas: they are all FGN bonds... saving ,green .2020,2030 last time i bought was in 2016 ....minimum is 10 k as written on the form on debt management office website *Gavrelino123: That's good....did you purchase the BOND through your bank or a discount house..? My knowledge on Federal Government Bond is limited academically......I don't have any practical knowledge about it... Kindly enlightened me the processes on how to Suscribe for it... Explain it in stages.... Thanks.. ahiboilandgas: bank ...u can download it form from the debt magntment office website fill and submit to participating banks . I have some runing till 2030..@15.54....mix up your investment (bond,tb )for stability ....all fixed income investor (banks discount houses and pension company) have the mix....best strategy....use coupon payment to buy treasury bill .....this immune u from price drop gtb@ 15.54 2020 *spenca: These banks put a limit to the principal they take for bonds due to the longtivity of the asset. They try to avoid traders buying the instrument rather than investors. If you want to purchase the FGN bonds you may approach a house to buy from the secondary market for you if you do not meet the criteria of your commercial bank. Bonds are traded daily and sometimes you may get investors willing to share part of their bonds which may match the principal which you intend to invest. The beauty of bond is the steady stream of inflow quarterly or bi-annually which can be further invested in other assets T-bills or equities. Download the form from DMO and take it to your commercial bank. It is best you emphasized it is FGN BONDS and not FGN SAVINGS BONDS these are two different instruments Gavrelino123: Thanks.....but how's the interest calculated..?using 10m for example at an interest rate of 15%. what are the taxes like compared to TB.?l confluence: That should be #750k biannual, making it#1.5M for one year awesomeJ: T- bills and bonds are tax free till 2021. Hopefully, the waiver will get extended beyond then. 3 Likes 1 Share |
Re: Bonds Investors Hub by beyolah: 10:52pm On May 25, 2018 |
Gavrelino123: Thanks 2 Likes 2 Shares |
Re: Bonds Investors Hub by awesomeJ(m): 11:04pm On May 25, 2018 |
Many thanks beyolah for opening this thread. Perhaps I could suggest that we modify the topic to imply a broader scope. FGN bonds are just one form. I'd also like us to consider: Corporate bonds (some currently have yields above 17%); Eurobonds; state government bonds; and bond mutual funds. Our aim I guess would include maximising the returns on our investment portfolios. 5 Likes |
Re: Bonds Investors Hub by beyolah: 11:13pm On May 25, 2018 |
awesomeJ: Thanks for the suggestion. Like you mentioned, our aims definitely includes maximising the returns on our investment portfolios. Here are some ideas 1) Investing in bonds 2) Investing in FGN Bonds and others 3) Investing in every kind of bond 4) Bond investors Which do you think would be most suitable? 3 Likes |
Re: Bonds Investors Hub by awesomeJ(m): 11:23pm On May 25, 2018 |
1. FGN Bonds. Tenors are often 5, 10 and 20 years. There are also 7 year FGN bonds Primary market auction happens monthly often the 3rd or 4th Wednesday of each month. Bids can only be made through the primary dealer market makers which are mostly banks and discount houses. Since 2017, the new threshold for participating in a bond PMA has been set by the DMO at 50m. What I don't know yet is whether the PDMMs have ways around that as with T-bills. Secondary market: Buying a 20 year bond and having to hold to maturity can be quite scary. A lot can happen in 20 years right? So early termination is much possible with bonds. A 20-year bond can be resold after just a few days of purchase. The NSE and FMDQ OTC and maybe interbank market too are the secondary markets for these instruments. Tbe liquidity levels as well as transaction thresholds in each of these markets I don't know, but I trust experts that'll come here to help with those. As with T-bills, apart from earned interest, capital gains also provide another income form on bonds. This happens when a bondholder buys at a high yield and sells at a lower yield. Coupons, yield, and bond prices are other things I'd like to touch in my next post. Also for the other bond forms I'd like to mention what I know about their primary and secondary markets. Welcome all, to this awesome thread. 14 Likes |
Re: Bonds Investors Hub by awesomeJ(m): 11:26pm On May 25, 2018 |
beyolah:I'd go with 4, maybe something like "bond investors meet here" or "bond investors hub" or something else similar. 2 Likes |
Re: Bonds Investors Hub by awesomeJ(m): 11:28pm On May 25, 2018 |
In the secondary market, bond prices and yields are inversely proportional. We'll have a clear understanding of this as we move on. |
Re: Bonds Investors Hub by awesomeJ(m): 11:32pm On May 25, 2018 |
Why do I consider this thread timely? At 10% discount, T-bills aren't anymore as attractive as they used to be. Stock market? Not the right time now. Yet I saw a bond with a 17% yield and another with a 19% yield on the FMDQ's daily quotation list last week. So I wanna find out if these instruments are accessible, so I don't miss out on available opportunities. Right thinking shey? 8 Likes |
Re: Bonds Investors Hub by tchimatic(m): 11:43pm On May 25, 2018 |
Love this thread. |
Re: Bonds Investors Hub by beyolah: 11:48pm On May 25, 2018 |
awesomeJ: Very right thinking, infact, correct thinking! Please let us know how it goes. |
Re: Bonds Investors Hub by Nobody: 12:37am On May 26, 2018 |
I don put one leg here dey wait. thanks guys for diversifying. plan getting bonds next month and believe I must have learn enough before then. |
Re: Bonds Investors Hub by Liljel: 6:39am On May 26, 2018 |
Ok , a whole lot of excitement here. Let us be careful while buying bonds , there are some instrument with great coupon but highly illiquid. So be sure to ensure you are getting a liquid bond Incase you need to call before maturity. Bonds of 20-30 years from now will be illiquid because the holders are usually PFAs , Merchant , Morgage or some institutions. In Nigeria we have the following bonds Sovereign bonds (FGN) Municipal bonds ( state) Savings bonds (issued by FGN for retailers) Corporate bonds (organizations) As a guy at his peak, I prefer the corporate bonds, they offer better coupon in line with risk principal of higher the risk taken, the higher reward. 10 Likes |
Re: Bonds Investors Hub by awesomeJ(m): 7:23am On May 26, 2018 |
results of the last PMA. Yields at 13.5% versus 10.7% T-bills discount. For a fair comparison though, 10.7 T-bills discount has a yield of about 12%. but that extra 1.5% on bonds may be worth it still.
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Re: Bonds Investors Hub by Just2endowed2(m): 7:25am On May 26, 2018 |
Liljel: How do one get corporate bonds 1 Like |
Re: Bonds Investors Hub by Agbaletu: 7:42am On May 26, 2018 |
I am in. This thread is timely now that Tbill is no longer attractive. Good job my people. |
Re: Bonds Investors Hub by NL1960: 8:50am On May 26, 2018 |
following. |
Re: Bonds Investors Hub by Nobody: 8:53am On May 26, 2018 |
How do I get the 10yr bond in june |
Re: Bonds Investors Hub by awesomeJ(m): 9:05am On May 26, 2018 |
yields of some bonds on the FMDQ 1 Like 1 Share
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Re: Bonds Investors Hub by damuseron(m): 9:40am On May 26, 2018 |
Great job, guys,! A timely discussion, am all in |
Re: Bonds Investors Hub by awesomeJ(m): 10:18am On May 26, 2018 |
So I was on the phone with a rep from one of the PDMMs (Stanbic IBTC) this morning. I asked her for the procedures for buying FGN BONDS, saying emphatically that I meant FGN BONDS and not FGN savings bonds. She put me on hold for about 5 minutes. Thereafter she resumed the call to tell me that all I needed to do was pick up an application form from my relationship manager, fill up and submit. I already figured that out based on my experience with T-bills purchases. What I actually wanted to know more was their threshold. So I asked "what's the minimum investment I can make" She responded by saying "N5,000.00" I reemphasized to her that I was inquiring about the regular FGN bonds with 5 ,10 year tenor and not the savings bonds. I also asked if she could reconfirm as some changes were made to bonds investing last year, she said again "the minimum is N5,000.00" I just concluded that perhaps all she did while she put me on hold was read up some outdated stuff, as against putting a call through to someone in Treasury that I expected. Anyways, I'll make some more calls, and Gaverelino123 has promised to visit his bank next week. We await his feedback. I'll try putting up the phone contacts of some of the primary market dealers so some other forumites can also try reaching them. 7 Likes |
Re: Bonds Investors Hub by Nobody: 12:44pm On May 26, 2018 |
Printed out both forms and it's stated clearly : savings Bond, from 5k to Max of 50m and FGN bond is minimum of 10k and no max 2 Likes
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Re: Bonds Investors Hub by beyolah: 1:03pm On May 26, 2018 |
Are we to state our bid for FGN Bonds? |
Re: Bonds Investors Hub by Kolping: 1:45pm On May 26, 2018 |
Re: Bonds Investors Hub by Kolping: 1:46pm On May 26, 2018 |
Note that there is already a thread for FGN Savings Bond opened in March 2017. https://www.nairaland.com/3658395/fgn-savings-bond beyolah: 3 Likes |
Re: Bonds Investors Hub by awesomeJ(m): 1:51pm On May 26, 2018 |
Kolping:We want to do Eurobonds, State government bonds, and especially corporate bonds too. 2 Likes |
Re: Bonds Investors Hub by Kolping: 1:52pm On May 26, 2018 |
Ok. Good. I'm interested in FGN Bonds and Eurobonds. awesomeJ: 1 Like |
Re: Bonds Investors Hub by awesomeJ(m): 1:54pm On May 26, 2018 |
GODAKPAN:I guess we'll have to contact each dealer to be sure of their specific rules. Remember even when T-bills minimum was 10k, Zenith wouldn't let you buy with less than 1m. 2 Likes |
Re: Bonds Investors Hub by awesomeJ(m): 1:56pm On May 26, 2018 |
Kolping:I once learnt that the minimum investment for Eurobonds with Investment One Financial Services is $200k (N72 m). I'm sure with time, we'll find out more about other investment houses. 1 Like |
Re: Bonds Investors Hub by Kolping: 2:06pm On May 26, 2018 |
That's a lot of money for an individual. awesomeJ: |
Re: Bonds Investors Hub by Agbaletu: 2:07pm On May 26, 2018 |
awesomeJ:200K$ is a lot of money. Can one invest in Eurobonds with $ dom account? There is a need to know the current minimum amount they accept. 1 Like |
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