Seun:
Please tell us more about this! Which bank and what's the name of their investment arm?

I have said it here before that am a shrewd investor! I put most of my investment funds in Fidelity Securities.. i get to buy TB through them and when i collect my upfront I pay the cheque into my savings account in the Fidelity Bank and then wire to my savings in other banks!

I have found it most convenient with the advent of internent banking. Moreover they are my stock brokers so i can easily move my funds from Stocks to Tbills witout any charges or COT!

@feelamong: It seems unlikely that you won't get charged at some point when you're moving your funds around in this complicated manner. I bet you are paying certain fees to Fidelities Securities each time you trade, since they are not a charity.

Seun:
You also pay a COT of 0.5% at the end of the month. So the total cost is 0.625%, out of the 2.N% you get on 90 day tbills.

But I read that CBN ordered banks to reduce COT to 0.3% i.e. N3 on every N1,000. Have the banks failed to implement this?

Am interested, pls role me in.

Seun: @feelamong: It seems unlikely that you won't get charged at some point when you're moving your funds around in this complicated manner. I bet you are paying certain fees to Fidelities Securities each time you trade, since they are not a charity.

To be sincere with you, I dont get to pay any charge other than the .125%!

I dont pay any fees on my stock trading account other that what other customers pay..1.81% for purchase and 2.18% for sales!

If you understand how these banks work.. you will always find a way round their funny charges..BTW i was once a banker!

There was no auction on 3 April so I guess the 2 week cycle has changed. The next 3 auctions should be on 10, 24 April, 8 May.

They may have altered the cycle to beat quite a few public holidays which auction days would have fallen on in the previous auction Calendar. 1 May (May Day), 29 May (Democracy Day), June 12 (Democracy Day Lagos only)

Getting information in Nigeria is almost impossible

pappilo: There was no auction on 3 April so I guess the 2 week cycle has changed. The next 3 auctions should be on 10, 24 April, 8 May.

They may have altered the cycle to beat quite a few public holidays which auction days would have fallen on in the previous auction Calendar. 1 May (May Day), 29 May (Democracy Day), June 12 (Democracy Day Lagos only)

Getting information in Nigeria is almost impossible

I fully agree with you. The FG has annouced that there will be an auction on April 10th.

Stop rates 10/04/2013

91 days: 10.49%

182 days: 10.68%

364 days: 10.71%

Hmmm.!

This thing don begin to dey goi down again o!

Abi awon Foreign Investors don come back?

Seun, Feelamong et al

I am planning to put in a bid for TBills on auction day 8 May and I need to clarify one issue.

Say on auction day 24/04/14, 364 day TB is issued at 11%. Then on the next auction day 08/05/13, I ask my bankers to put a bid in at 10.5% for 364 day TB. At the end of the auction if 364 day TB are issued at 11.5%, what rate do I get?

@papillo: In developed countries, everyone will get the same rate, but in Nigeria, you will get the rate you bid for, which is wrong.

Seun: @papillo: In developed countries, everyone will get the same rate, but in Nigeria, you will get the rate you bid for, which is wrong.

bros leave those developed people joor!

why should every one get the same rate? I stick out my neck risk and you no wan risk; and you want make we all enjoy the same rate? Abegi!!

anyway thats the beauty of Tbills.. it comes with some element of gambling and thats why we love it!

One of the benefits of the uniform price auction is price discovery. If I know that I will pay the same rate as everyone else, I will be motivated to bid the lowest rate that I can accept in order not to miss out completely. So the final price will truly reflect the rates that people are actually willing to accept for the given supply of tbills. When the rates go down, it means there is more demand, and when the rates go up it means there is less demand. The interest rates can be used to make investment and policy decisions because the rates mean something.

The current auction format causes people to bid higher than the minimum they are willing to accept. It makes them bid slightly lower than what they think others are going to bid. This makes the cut-off rate completely meaningless, because instead of representing true demand and supply, it represents what some people think other people will bid. If the rates go up, it may be because of reduced demand, but it could also be because people thought there would be reduced demand. If the rates go down, it could be because of increased demand, or because people thought there would be increased demand. This adds a random error to the stop rate and makes it a less reliable basis for making investment decisions.

The current system is good for insiders who probably know what the stop rate is likely to be, but it's bad for the rest of us.

Seun: One of the benefits of the uniform price auction is price discovery. If I know that I will pay the same rate as everyone else, I will be motivated to bid the lowest rate that I can accept in order not to miss out completely. So the final price will truly reflect the rates that people are actually willing to accept for the given supply of tbills. When the rates go down, it means there is more demand, and when the rates go up it means there is less demand. The interest rates can be used to make investment and policy decisions because the rates mean something.

The current auction format causes people to bid higher than the minimum they are willing to accept. It makes them bid slightly lower than what they think others are going to bid. This makes the cut-off rate completely meaningless, because instead of representing true demand and supply, it represents what some people think other people will bid. If the rates go up, it may be because of reduced demand, but it could also be because people thought there would be reduced demand. If the rates go down, it could be because of increased demand, or because people thought there would be increased demand. This adds a random error to the stop rate and makes it a less reliable basis for making investment decisions.

The current system is good for insiders who probably know what the stop rate is likely to be, but it's bad for the rest of us.

I think the current sysytem is good for the borrower (CBN/FGN) and who am I to complain when i cannot get this rate from any commercial bank tax free!

Oh God! I have miss great opportunity. I never knew about TBill since, if not for Chidi who raise the topic today on Skype group chat. No wasting time, i am going venture into TBill soonest.

...

giftbox: I am interested in treasury bills, could u see me through its processes or link me to someone who could help. thanks a lot

Just contact your bank. They will give you a form to fill, and process everything for you.

thanks seun

Inflation Drops To 8.6 Percent, Lowest In 5 Years


How does this affect the Nigerian Treasury Bill yield/interest? I guess it will negatively affect it.

It may mean that people will be willing to accept slightly lower rates, assuming the figure is real.

pappilo: But I read that CBN ordered banks to reduce COT to 0.3% i.e. N3 on every N1,000. Have the banks failed to implement this?

Some banks started the implementation on the 1st of April. You should experience a lower COT at the end of this month.

Desanta: Inflation Drops To 8.6 Percent, Lowest In 5 Years


How does this affect the Nigerian Treasury Bill yield/interest? I guess it will negatively affect it.

That means we are getting close to a time when Fixed Deposit will be preferable to Treasury Bills.

I was told @ my branch that the last TB rate was 7.4 while in anoda branch of GTB I was told 10.2.Though I have instructed my bank to make a bid for me in the next one,but I am afraid the marketer @ my branch is trying to play smart on me, please can I do? Is there no uniform rate for all the branches? Pls urgent advice.

tenry: I was told @ my branch that the last TB rate was 7.4 while in anoda branch of GTB I was told 10.2.Though I have instructed my bank to make a bid for me in the next one,but I am afraid the marketer @ my branch is trying to play smart on me, please can I do? Is there no uniform rate for all the branches? Pls urgent advice.

Yes, the marketer at your branch was either ignorant or was trying to play a fast on you. The rates in the last auction are listed here.

info on today's bid

laceonline02: info on today's bid

91 DAYS ------ 10.35%

182 DAYS -----12.09%

364 DAYS -----12.249%

HAPPY INVESTING!!

wowzers! Thanks bro!

@Feelamong and Seun

I am new to this Tbills schiznit and I am going to the market next auction 8 May for 364 day bills but need some expert advise. Going by todays rates, what rate do you suggest I ask my banker to bid, 11.75%? I am desperate to get on this gravy train as quickly as possible and I want to put in a rate that will be sure to be accepted.

Regards

pappilo: wowzers! Thanks bro!

@Feelamong and Seun

I am new to this Tbills schiznit and I am going to the market next auction 8 May for 364 day bills but need some expert advise. Going by todays rates, what rate do you suggest I ask my banker to bid, 11.75%? I am desperate to get on this gravy train as quickly as possible and I want to put in a rate that will be sure to be accepted.

Regards

I suggest 11.99% for 364 days. God bless Nigeria.

Clarification!!! If i ask my bank to bid on my behalf..ll my interest rate be the cbn stopping rate or my bank's bidding rate?

laceonline02: Clarification!!! If i ask my bank to bid on my behalf..ll my interest rate be the cbn stopping rate or my bank's bidding rate?

you will get your (bank's) bidding rate.

So for example if you bid 11.5% and the stop rate is 11%, you will be unsuccesful. If however the stop rate is 11.75%, you will be sold the bills at your bid rate of 11.5%.

pappilo: So for example if you bid 11.5% and the stop rate is 11%, you will be unsuccesful. If however the stop rate is 11.75%, you will be sold the bills at your bid rate of 11.5%.

Thanks for the info...its unfair oo..i think the rate should be uniform..pls do you advise i go with my bank(gtb) bidding or i state my bidding rate.