Gurus in the house, thanks for sharing all knowledge. I am new in the house and have followed events here with rapt attention. I need some clarification please. If I put forward N1,000,000.00 for secondary TB for 105 days at 13%, what would be the discounted value and face value. From my little understanding of TB, my N1,000,000.00 should be the discounted and the face value should be the N1m plus the interest. I will appreciate your feed backs as I presume I am being short changed.

bee2bee:
Thanks @ godash, omonigeriarere, ukay2. I understand better now. So meaning GTB will credit 3M into my account at maturity.

You are welcome.

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My bankers @ my Diamond Bank seem to be dull and clueless when it comes to TB.

On Wednesday 14/09/16 I asked CC who confirmed they usually sell. All I need is to write declaring my interest in purchasing TB. After writing, I took the letter to my account officer who didn't seem to know anything about it (she said they sell everyday which is not really true as its the secondary market that sells everyday while the primary market is every two weeks and that was the market I was interested in) she then resorted to asking someone else in another branch. the response from the guy in the other branch was they didn't sell that day.

To cut the long story short, that was how they didn't let me buy from the primary market on Thursday 15/0916. I will be running to another bank when the next bid scheduled for 29/0916 opens.

if i invest. 2m in 91 days TB bill with 10% interest, am i getting 2m+10% after 91 days ? or is it per annum.

You will get the discount upfront with the rate being an annual figure. So if you do it for this example today, you'll get 2M * 10% / 366 days * 9 days ie 49,726.78 upfront (less fees) and then you get the 2M after the 91 days.

Think of it this way, any time you see interest rate, assume it is annualized ie per annum unless otherwise stated. And with TB, discount is applied upfront. That's what is commonly called interest.

bee2bee:
Hello all, please someone who has bidded with GTB before should help me out. This is my first time using GTB. I submitted request for 3M at 13.98% and i understand the stop rate is 14%. I just saw debit alert in my email now for N2, 895, 722.95 for Tbills, 300naira for commission and 750naira for custodian fee. Please why was 3M not debited?
cc:feelamong

I'm thinking on going with GTB or FBNquest for the next auction. Can you kindly share more about your experience for this transaction?

CuteTj:
I will be running to another bank when the next bid scheduled for 29/0916 opens.

The next auction will be next week Sept 21st.

lilreese:
if i invest. 2m in 91 days TB bill with 10% interest, am i getting 2m+10% after 91 days ? or is it per annum.

the rate is per annum.

http://www.bloomberg.com/news/articles/2016-09-16/s-p-downgrades-nigeria-further-into-junk-as-oil-crisis-worsens

Interesting to see what effect this has overall.

Please what about UBA. Did dey debit anybody. I applied for 182days.

I've learned a lot on this thread and continue to. Thanks a lot to all the contributors here and to @feelamong for taking the initiative to start the thread.

I made my first Nigerian Treasury Bills (NTB) investment at the last auction after several years of fixed depositing. In trying to understand how the numbers tie together, I created a calculator for NTB investments and shared snapshots of it a few times on the thread.

Seeing the interest the snapshot generated from PMs I got, I cleaned it up and I'm now sharing it here for the entire community to benefit from. See the attached Excel file below.

To use it, just change the blue font cells to your particular investment situation.

Let me know your thoughts on it. However, I take no liabilities for your use of this calculator. So, use at your own risk. Also, like it, feel free to share it, and spread the love (of God)!

Happy investing everyone!

All, Sharing an exchange i had with someone over email. These are just my answers. If anyone has better information, please post so we can all learn

I just did the calculation using 1.8m and realised reinvesting will generate additional 70k. I have the following questions
So how do it really work? Will i just tell the bank that the upfront interest should be reinvested and i should just fund my account with the 1.8m?

ask your bank if there allow reinvestment. I spoke with someone in GTB yesterday and he told me yes, as long as I know how to do the calculations and fund correctly. I've seen FBNs form and "reinvest upfront interest" is an option on it. Other than those 2, I don't know anyone else.

Does that mean i will get a certificate showing 2,194,017.00?

you won't get a certificate. You should get an investment advice/letter though that lays out the investment. I don't know the details/assumption you used in the calculator but if you did it right, what you will see on the advice/letter is the "face value, rate, tenor and maybe discounted value, tenor and dates".

Assuming i want to sell the treasury bill before maturity how will i go about it?

if you are getting from the government, you're buying from the primary market. There's a secondary market to sell (and buy) TB will varying non-standard tenors and lowered rates. I don't any experience with this though. But from what I hear, it's a tough for small investors to participate. If I were you, I'll pay to hold it through the full tenor and plan for that accordingly.

Assuming i hold it my position till maturity, at maturity will i be credited by the broker (the bank) or how is it done?

actually, this is my first time buying NTB. I'll have to wait for maturity to see how the repayment of face value.happens.

I bank with Sterling bank and they told me that they only charge N1 on every N1000 as account maintenance fee, No commission, no VAT, no bank charges, no custodian fee. But i don't know how good their service is. I am considering Stanbic IBTC because more people from the trend seem to have satisfied experience with them, do you know their charges?

I've only spoken with the above banks, investment-one and the old Kakawa Discount house. So I don't know Sterling or Stanbic's fees or processes. Economically, I would compare their fees with the others, see if they can bid for me and if it all make sense to me, I'll go with them. I'll need to know if that 1naira is on every 1000naira of the face value, of the interest, or of the discount value paid upfront. I also don't know if it's that fee will be posted for the tenor or tenor won't factor in at all. Those all the things I'll want to know to make an economic decision.

Which bank do you recommend and what are their total charges?
I plan partaking in the upcoming auction on Wednesday.

again, can't make a recommendation on any bank yet until I go through the entire process.

Good luck to you as you bid next Wednesday. Happy investing!

Thanks.

@godash... talking abt nxt wk auction, is 18percent okay for 364days? plz guys una contribution dey important!

godash:


I'm thinking on going with GTB or FBNquest for the next auction. Can you kindly share more about your experience for this transaction?

Not a bad experience at all. It was my first time with them. I just walked into one of their branches and got email address on their marketing team. Sent them a scanned instruction which was acknowledged. I picked the rate myself.

godash:
I've learned a lot on this thread and continue to. Thanks a lot to all the contributors here and to @feelamong for taking the initiative to start the thread.

I made my first Nigerian Treasury Bills (NTB) investment at the last auction after several years of fixed depositing. In trying to understand how the numbers tie together, I created a calculator for NTB investments and shared snapshots of it a few times on the thread.

Seeing the interest the snapshot generated from PMs I got, I cleaned it up and I'm now sharing it here for the entire community to benefit from. See the attached Excel file.

Let me know your thoughts on it. However, I take no liabilities for your use of this calculator. So, use at your own risk. Also, spread the love and free feel to share it!

Happy investing everyone!

Thanks for the efforts and the excel education that also improved my excel skills.

pls somebody tell me what to bid. i want to bid 14% for 91days.

ukay2:



Your interest for 3M 91 day NTB at 13.98% is N104, 562.73k , so when you minus the interest from 3M ,you will get the N2,895,722.950. ....I.e 13.98/100 ×30000000×91/365 =N104,562,73k

The N750 Custodian fee came from gtb 0.717% fee on the N104, 562.73k ....I. e x/100 ×104,562.73 =750 will give you 0.717%.......note some banks like stanbic ibtc bank charges 0.125% as Custodian fee.

The N300 transfer fee of your money to CBN is constant for all banks....

Hope my explanation will help


Oga feelamong and other gurus can confirm if am correct.

Thanks.

GTB's charge for custodian fee is actually 0.1% of the face value over the tenor as a fraction of a year and not of the upfront discount as you calculated above.

FIDELITY24:
@godash... talking abt nxt wk auction, is 18percent okay for 364days? plz guys una contribution dey important!

At this time, I don't have that expertise yet. I'm hoping someone with access to secondary market can give some guidance on the rates for the 21st auction ahead of the Tuesday's deadline to finalized purchase requests.

seyi42k:


Thanks for the efforts and the excel education that also improved my excel skills.

you are welcome.

godash:


GTB's charge for custodian fee is actually 0.1% of the face value over the tenor as a fraction of a year and not of the upfront discount as you calculated above.

Thanks Sir

.

as I stated earlier, my bid for TB @ 14.25 for 91 days last week was unsuccessful.

I got a call yesterday from my bank informing me my bid was unsuccessful (I knew that already based on @feelamong info).

The surprising thing was when he asked if he could go ahead with the purchase of TB at 14%.

I'm kinda surprised because I thought once a bid is unsuccessful you had to wait till the next auction date or go through the secondary market at a lower discount rate (e.g.13%)

CuteTj:
My bankers @ my Diamond Bank seem to be dull and clueless when it comes to TB.

On Wednesday 14/09/16 I asked CC who confirmed they usually sell. All I need is to write declaring my interest in purchasing TB. After writing, I took the letter to my account officer who didn't seem to know anything about it (she said they sell everyday which is not really true as its the secondary market that sells everyday while the primary market is every two weeks and that was the market I was interested in) she then resorted to asking someone else in another branch. the response from the guy in the other branch was they didn't sell that day.

To cut the long story short, that was how they didn't let me buy from the primary market on Thursday 15/0916. I will be running to another bank when the next bid scheduled for 29/0916 opens.

most people employed in banks are stark financial illiterate. very few knows how the financial systems work.

@ ukay2, godash, NOLONGTIN1 and other experienced TB investors

My Diamond Bank seems to be clueless regarding anything Treasury bills. Kindly advice on banks (with the exact branch locations) where i can purchase the bills without hitches. I want to participate in the bid coming up in 2 days time.

Awaiting your kind responses asap.

CuteTj:
@ ukay2, godash, NOLONGTIN1 and other experienced TB investors

My Diamond Bank seems to be clueless regarding anything Treasury bills. Kindly advice on banks (with the exact branch locations) where i can purchase the bills without hitches. I want to participate in the bid coming up in 2 days time.

Awaiting your kind responses asap.

Any stanbic ibtc bank or GTB will help you do it yourself.....I use stanbic ibtc bank while my friend uses gtb. ..you can bid for yourself in both banks......but stanbic ibtc bank total charges is a bit smaller than gtb..though negligible.

Deadline for submission of your form is 2 pm Tuesdays before bidding Wednesdays in both banks...

Most customer care personels in both banks are very enlightened on NTB programme except they will convince you to go for their own fixed deposit investment that the interest is ridiculous now bearing in mind that the inflation rate of August 2016 is about 17.6%........ for me, any rate lower than inflation rate is not worth it. ....hence I usually go for NTB 364 days at rates from 18.0 to 18.3% if am bidding. .....

Am bidding for myself of NTB 364 days @18.37% tomorrow. ...hope I will be successful so that I can pay my children school fees with the upfront interest....

My oga feelamong and other gurus in the house have the final say.....a beg make una advise us the rates for tomorrow. ...

Thanks

I went to diamond bank to apply today, at first d guy I met said ther is no primary auction 2day Bt I was fully ready for their bullshit. so I insisted till he decided to confirm n Yes I was right... d guy was surprised coz he thought d auction is nxt wk. Make una wish me well o, I went for a 364 tenor @ 18percent

[color=#990000][/color][b][/b]

godash:
I've learned a lot on this thread and continue to. Thanks a lot to all the contributors here and to @feelamong for taking the initiative to start the thread.

I made my first Nigerian Treasury Bills (NTB) investment at the last auction after several years of fixed depositing. In trying to understand how the numbers tie together, I created a calculator for NTB investments and shared snapshots of it a few times on the thread.

Seeing the interest the snapshot generated from PMs I got, I cleaned it up and I'm now sharing it here for the entire community to benefit from. See the attached Excel file below.

To use it, just change the blue font cells to your particular investment situation.

Let me know your thoughts on it. However, I take no liabilities for your use of this calculator. So, use at your own risk. Also, like it, feel free to share it, and spread the love (of God)!

Happy investing everyone!

Thanks for the template bro...great stuff. I am trying to understand how it works. Does this mean 1M will be debited from my account initially? Then an interest of ₦226,633.78 will be paid almost immediately? If my understanding is correct, please confirm how much will be credited to my account at maturity. I'm guessing it's the same 1M?

If this is the case, then, what is the amount I will specify on the bid form for this scenario? Is it 1M or 1.226M?

sureguy02:
[color=#990000][/color][b][/b]

Thanks for the template bro...great stuff. I am trying to understand how it works. Does this mean 1M will be debited from my account initially? Then an interest of ₦226,633.78 will be paid almost immediately? If my understanding is correct, please confirm how much will be credited to my account at maturity. I'm guessing it's the same 1M?

If this is the case, then, what is the amount I will specify on the bid form for this scenario? Is it 1M or 1.226M?

subtract the quoted interest from 1M. That is what ll be deducted from your account which u ll gt 1M on maturity.

Sylverly:
subtract the quoted interest from 1M. That is what ll be deducted from your account which u ll gt 1M on maturity.

That's still the same as debiting the account with 1M and crediting it with N226K

sureguy02:


That's still the same as debiting the account with 1M and crediting it with N226K

interest is upfront.

for tomorrow's auction, what do folks in the house think about 18.5% for 364 days?