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Nairaland Forum / Nairaland / General / Investment / Treasury Bills In Nigeria (4610949 Views)
Fixed Deposits Or Treasury Bills, Which Is Better? / Fixed Deposit And Treasury Bill Investments From Abroad / I Need Information On Treasury Bills In Nigeria (2) (3) (4)
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Re: Treasury Bills In Nigeria by yomi007k(m): 10:02am On Sep 23, 2015 |
Pls how many ppl have invested in FGN bonds. I'm thinking switching from T-bills to FGN bonds, n wud like 2 know pros n cons becos na my life savings. |
Re: Treasury Bills In Nigeria by feelamong(m): 10:20am On Sep 23, 2015 |
yomi007k: I do FGN bonds for targeted issues like my kids sch fees and it makes a whole lot of sence.. got FGN Bonds at 15.38 in August Auction (15.54% coupon)..... just be ready to hold till maturity sha cos its a long term investment especially as ur volume will not be saleable in the secondary market 1 Like |
Re: Treasury Bills In Nigeria by yomi007k(m): 10:36am On Sep 23, 2015 |
feelamong:I plan to hold till maturity oo... I wanna buy plenty garri keep n be living on d returns. Tnx boss, |
Re: Treasury Bills In Nigeria by pipz(m): 12:08pm On Sep 23, 2015 |
Moses247: From my understanding and experience, capital can only be guaranteed on a fixed term investment. hence, when they tell you ur principal is guaranteed, you should also ask them should in case you need to cash out at any given time would this still apply ? FBN Asset is reliable, but note, make sure you read through their T & C'S very well before initiating anything. let their documentation and forms state these clauses very clearly that you are entering into a risk free investment and can cash out at any time with your principal protected. |
Re: Treasury Bills In Nigeria by quertyquack: 3:56pm On Sep 23, 2015 |
First off, I have not bought bonds. So, I'll be telling you why I stick with tbills of 182 days or less. It is principally because its short term and I can reinvest at maturity if a more rewarding investment pulls up. I can't do that with a bond investment. Also, if the naira gets devalued, I can adjust as required. Different strokes for different folks you may say. yomi007k: |
Re: Treasury Bills In Nigeria by yomi007k(m): 4:07pm On Sep 23, 2015 |
quertyquack:Hmm ur right. But I think d interest rate bonds gives is still d highest so far. |
Re: Treasury Bills In Nigeria by vacanci: 4:18pm On Sep 23, 2015 |
feelamong: What percentage will your coupons be paid. Will it be 15.38% or 15.54%. Also, why will it not be sellable at the secondary market. 1 Like |
Re: Treasury Bills In Nigeria by feelamong(m): 5:00pm On Sep 23, 2015 |
vacanci: Your coupon comes in 15.54% yea you may not be able to sell in the secondary markets cos at the moment the retail end is noit developed. Most of the players in the Bond markets are the PFAs, Banks, Asset managers. These guys only deal in big bucks and are not ready to purchase Bonds of less than N100M most times! 1 Like |
Re: Treasury Bills In Nigeria by inze(m): 8:04pm On Sep 23, 2015 |
yomi007k: The above reminds me of the below: when you already won 5million on wwtbam, and frank ask you, "what is the first name of Neil Armstrong last daughter?" in otherwords, i advice you stick to which you understand very well 1 Like |
Re: Treasury Bills In Nigeria by yomi007k(m): 8:33pm On Sep 23, 2015 |
inze:But this case is different. This is not a game..this is getting back as much as u put in. If I was playing with Frank, I wud know wen to walk away. |
Re: Treasury Bills In Nigeria by Nobody: 9:34pm On Sep 23, 2015 |
Please when is the next TBills auction? |
Re: Treasury Bills In Nigeria by mekaboy(m): 9:53pm On Sep 23, 2015 |
If Nigerian goes into recession in 2016(God Forbid) what will be the effect on tbills and bonds? Will the govt still pay the agreed interest on investment ? |
Re: Treasury Bills In Nigeria by vitality22(m): 10:08pm On Sep 23, 2015 |
adrianstylez:The next should be on the 1st of October 2015 i guess, which will be exactly 2 weeks from the last one. |
Re: Treasury Bills In Nigeria by X2X(m): 10:30pm On Sep 23, 2015 |
vitality22: No be public holiday be that? |
Re: Treasury Bills In Nigeria by petikal(m): 5:26am On Sep 24, 2015 |
mekaboy: Unless they make drastic changes to policies, or the nation ceases to exist, TBills and bonds have always been one of the safest and stress-free investment instruments. When you understand how this works, you realize why even banks discourage their customers from doing it. The chance of what you're thinking of happening is very very slim. Recession will actually cause the interest to go up, as FG looks to give higher incentive for borrowing from her citizens to stimulate the economy. That's what these things are: FG "borrows" from you to finance projects or mop up excess money in the system. 1 Like |
Re: Treasury Bills In Nigeria by babakess: 7:10am On Sep 24, 2015 |
yomi007k: TBILL FAR BETTER THAN BONDS .................... IF YOU BUY FGN BONDS @ 15.5% OVER THE 5 YEARS.......TOTAL RETURN=77.5% ASSUMING NO COMPOUNDING AS INTEREST IS PAID SEMI ANNUALLY NOW COMPARED TO TBILLS U BOUGHT @ 14% ...OVER 5 YEARS YOUR RETURN WONT BE 5*14%=70% BUT BECAUSE OF COMPOUNDING...IT WOULD BE 92.5% WHEN DIVIDED BY 5 U GET 18.5% ROI PER ANNUM... 1 Like |
Re: Treasury Bills In Nigeria by Nobody: 10:32am On Sep 24, 2015 |
Hello everyone. I need advice on investing 300k into TB and also to know my possible ROI. I'll be grateful. |
Re: Treasury Bills In Nigeria by Lionhearted: 10:58am On Sep 24, 2015 |
Assuming I bought T-Bills via Bank A and the said Bank A goes under before maturity, what happens to my investment? 1 Like |
Re: Treasury Bills In Nigeria by Naijainvestor: 4:09pm On Sep 24, 2015 |
babakess: You cannot compare TBill and Bonds just like that. To do the comparison you have to calculate the bond equivalent yield for the TBill You also assumed that you will get the TB at 14% for the entire 5 years which is most unlikely You forgot that TBills have higher reinvestment risk than bonds Good try though 1 Like |
Re: Treasury Bills In Nigeria by caesaraba(m): 4:59pm On Sep 24, 2015 |
Naijainvestor: Please can you explain more on the bolded? I'm planning to put something away soon with the hope of holding for 20 years min. Which would you advise? TBills or FGN Bonds? I've always thought TBills but clarification is needed on that "higher reinvestment risk" you stated. Thanks. |
Re: Treasury Bills In Nigeria by petikal(m): 5:00pm On Sep 24, 2015 |
Lionhearted:Your contract is with CBN, not your bank. CBN will find a way of returning your capital upon maturity. 1 Like |
Re: Treasury Bills In Nigeria by petikal(m): 5:11pm On Sep 24, 2015 |
Naijainvestor: Just wanted to chip in. For the benefit of our readers, can you explain how TBills have a higher risk, considering the advantage of immediate reinvestment of 100% of interest for higher gains? If I go for a long-term bond, the rate will be locked, which will be to my advantage if the economic situation in Nigeria gets better (a rare feat). But if inflation and currency devaluation continues, then TBill remains a better and more flexible option. |
Re: Treasury Bills In Nigeria by Naijainvestor: 5:18pm On Sep 24, 2015 |
caesaraba: Reinvestment risk is the risk of not finding appropriate investment when one investment matures. If you invest in FGN Bond with 15% coupon for example and maturity of 25 years, you are assured of the 15% for that period whether interest rate goes up or down. On the other hand if you invest in TBill that pays 15% for 364 days, you are not sure you will get another one with similar interest after 364 days. That is what reinvestment risk is all about To compare coupon bond with a discount instrument, you need to calculate the bond equivalent yield otherwise you will be comparing apples and oranges I may not be able to show you how to calculate it here as it involves many steps but I have it calculated for all TBills and may post it on the web site for Quantitative Financial Analytics 1 Like |
Re: Treasury Bills In Nigeria by caesaraba(m): 5:25pm On Sep 24, 2015 |
Naijainvestor:That would be awesome. Thank you so much. |
Re: Treasury Bills In Nigeria by Naijainvestor: 5:33pm On Sep 24, 2015 |
I will put that on the site later today |
Re: Treasury Bills In Nigeria by petikal(m): 5:59pm On Sep 24, 2015 |
Naijainvestor: That reiterates my point then. FGN Bond interest is fixed regardless of fluctuations in the economy - a good thing if the economy remains stable or improves. An improvement means low inflation, and generally a prolonged healthy economy in all areas - something we're yet to attain. Following historical patterns of the country seems to suggest that there are particularly good periods to invest, e.g during elections (more money volume in circulation), and during recession. You may not get the same interest on a TBill upon maturity, but it's not guaranteed to be low, it can be higher. Add immediate interest reinvestment to that, and it's even a better true yield. Note that I'm not discrediting bonds, there's a place for it. If you properly study any system, you can always get it to work to your advantage. 1 Like 1 Share |
Re: Treasury Bills In Nigeria by Nobody: 4:00am On Sep 25, 2015 |
If you sale a Real estate worth over Naira 100M, and you looking up another bizness let say starting up a filing station!...Then u stumble upon this thread figure out ..you could put the fund on TB and get 14% annual or go with your filling station plan but not sure that could generate 10% per annum of the said amount . Which would you do and why...(The said property sold r family house.) cc feelamong |
Re: Treasury Bills In Nigeria by carpenter(m): 7:46am On Sep 25, 2015 |
babakess: Just a note. You can compound on FGN bonds also. In fact you get to compound twice in a year instead of once with TBills. To compare objectively, if you are not compounding one, you should not be compounding the other... e.g. Using 100,000 naira as an example at the same percentages you have used above and for 5 years. The following is what you get at the end of 5 years 1. FGN Bonds: 210,946.73 2. TBills: 192,541.36 Note: I have not considered any other information besides what you have above as I treated this basically as numbers. So in actual fact, Tbills may be better than FG Bonds but not by the assumptions made by you above. |
Re: Treasury Bills In Nigeria by Harkynkunle(m): 9:08am On Sep 25, 2015 |
am surprised by what fbn did to me..... what actually happened is that... i placed a bid of #820,000 for 3 months (june - sept 2015) @ 10.5% which is expected to yield @ least #840,000 (capital included) @ d end... surprisingly, @ d end of d tenure what i got was #831,000 instead of my expected and due amount... am confused, though i've made a contact with first bank and they promised to get back to me... pls gurus in d house help have an insight on this... |
Re: Treasury Bills In Nigeria by petikal(m): 9:14am On Sep 25, 2015 |
timothy001: The beauty of physical assets is in the appreciation value over time - something that doesn't really happen with cash and definitely not Naira. But physical assets require work, and a level of stress management with maintenance costs, taxes, uncertainty in customer volume, etc. TBill is stress/tax free, but you risk having your capital lose value due to inflation or currency devaluation - same factors that'll increase the value of your physical asset. So, that's it, take your pick. By the way, didn't you ask this question almost 2 years ago? I suppose the answers weren't satisfactory. 2 Likes |
Re: Treasury Bills In Nigeria by petikal(m): 9:26am On Sep 25, 2015 |
Harkynkunle: That makes no sense. Are you sure this was TBill? Sounds like very low interest fixed deposit. When they deducted the money in June, how much was taken and how much was left in your account? You should see that in your alert. Was the details on the alert how you arrived at 10.5%, or did you go by what CBN offered for that period? CBN rates are almost always slightly higher than bank's winning bids. |
Re: Treasury Bills In Nigeria by Seun(m): 9:39am On Sep 25, 2015 |
timothy001:Put it in Tbills and continue searching until you find a business that can make more than 14% per annum then pull out some funds for that. |
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