CBN to sell N242bn treasury bills

Meanwhile the CBN will this week sell treasury bills worth N242.4 billion in continuation of liquidity mop up operations. The treasury bills comprise N45.18 billion worth of 91 day bills, N80 billion worth of 182 days bills, and N117.2 billion worth of 364 days bills.

This of course is to moderate the liquidity effect of the inflow of N218.36 billion through payment for matured treasury bills this week. The matured treasury bills comprise N21.15 billion worth of 91 days bills, N80 billion worth of 182 days bills, N117.2 billion worth of 364 bills and N72.9 billion worth of 185 days bills.

The combined effect of these developments is expected to moderate down cost of funds in the interbank money market.

Last week cost of funds rose marginally despite inflow of N400 billion from statutory allocation funds. The impact of the inflow was subdued by outflows through treasury bills and FGN bonds auction during the week. Although interest rate on Overnight borrowing dropped to 5.5 per cent last week from 11.63 percent the previous week, the interest rate for I month, 3 month and 6 month borrowing rose respectively to 17.86 per cent (from 17.73), 19.50 percent (from 19.12) and 23.14 percent (from 22.21).

http://www.vanguardngr.com/2017/01/forex-naira-appreciation-forwards-market-indicates-rising-confidence/

feelamong:


Channels wont tell you until maybe a day after..

If you want real time info on OMO..open a communication channel with an investment banker that works in Treasury

How do one get such ?

Agbaletu:

Zenith Bank, here i come with my 18.2% tomorrow for another 364 days. It seems i am alone with 18.5%.

18.4% at last.

Agbaletu:

18.4% at last.

Have you submitted your bid?

If I am to judge by a secondary market offer that a friend just told me about, rates are likely to remain the same or a little higher during this week's auction.

SuccessGee, we are waiting

Double post

deepwater:
someone please help me with calculations on below:

1. What is the interest if 1M is invested for 364 days at 18.6%

2. What is the interest if 1M is invested for 182 days at 17.6%

3. Please explain this true yield stuff, i am not getting it.

Thanks

For nos 1-2, DIY using the calculator in the link below

https://www.nairaland.com/878880/treasury-bills-nigeria/212#49454079

40manlappy:


Have you submitted your bid?

If I am to judge by a secondary market offer that a friend just told me about, rates are likely to remain the same or a little higher during this week's auction.

SuccessGee, we are waiting

I have submitted it. I am not sure it will go through due to the network problem in Zenith Bank since last week friday.
Thanks man.

Guys in the house. Pls in terms of feedback and efficiency. Which bank is better to do treasury bills with gtb or fidelity bank?

Thanks for your advice

40manlappy:


For nos 1-2, DIY using the calculator in the link below

https://www.nairaland.com/878880/treasury-bills-nigeria/212#49454079

Thanks bro, which is better off, union bank or UBA

deepwater:


Thanks bro, which is better off, union bank or UBA

I bank with UBA, my last two bid was successful, though they choose the rate

sunnyt1:
im going with 19% for 365 days

That is too wide afar, unless you know something we don't currently know.

awesomeJ:

primarily, the advantage money market investment has over treasury bills is the flexibility in redeeming your investment. For most MMF, you can redeem after the initial 30 days without incurring any penalty. You can even withdraw earlier albeit with a little penalty.
Aside this flexibility in withdrawals, the rates for funds like StanbicIBTC MMF compares with tbill rates as follows:
At about 17% currently, It
-beats 91-day NTB
-is almost at par with 182-day NTB(could be better off if your bank is funny)
- below 364-day NTB, by offering about 1,500 less in returns for every 100,000 invested.
The best thing is having a portfolio containing a mix of these investments, so you can leverage on the pros of each of them.

Is the interest on MMF upfront or back-end? That will affect the true yield.

Is the interest tax free like on NTB? If not, you will first forfeit 10% straight away as withholding tax followed by real income tax which can be debilitating if you are already in high income bracket from your other sources of income or it can push you into high income bracket

deepwater:


Thanks bro, which is better off, union bank or UBA

I don't know about UBA. Union Bank is ok but I used Stanbic for my recent bids and the experience has been good so far.

Hi Everyone,
Can we refrain from posting the amounts we are bidding with? This is an open forum where anyone can come in.
Let's keep ourselves safe and our finances secure.

Winneygirl:
Hi Everyone,
Can we refrain from posting the amounts we are bidding with? This is an open forum where anyone can come in.
Let's keep ourselves safe and our finances secure.

Supported

Well said @Winneygirl

@awesomeJ You are sighted!

Going by CBN's last OMO conducted on 26/01/2017, it appears that 18%-18.6% is in the safe region for 364 days.

252 days and 336 days TBills were sold for 18% and 18.6% respectively.

Looping: feelamong

2n2k:


Is the interest on MMF upfront or back-end? That will affect the true yield.

Is the interest tax free like on NTB? If not, you will first forfeit 10% straight away as withholding tax followed by real income tax which can be debilitating if you are already in high income bracket from your other sources of income or it can push you into high income bracket

Like Olujaidi earlier mentioned, most MMFs pay interests quarterly, rather than upfront, and as such, their yields should only be compared with the true yields of t-bills for a proper perspective.
I think Most MMF are exempt from WHT, perhaps it's cos a large chunk of their assets are allocated to t-bills, or perhaps the FG just wants to encourage an investment culture in the citizenry.

40manlappy:
Well said @Winneygirl

@awesomeJ You are sighted!

I see u too bro, guess we'll both be waiting for the 15th Feb auction. Didn't place any bid for this coming auction too.

Guys, how did you get your money back when your tenure ended. Do you contact your bank beforehand? Hope they didn't do auto recommit for you when you don't even request for auto recommit? Did you get your money exactly on the same date it is written that your tenure ended.
Thanks as you share your experience.

MercyLady3:
Guys, how did you get your money back when your tenure ended. Do you contact your bank beforehand? Hope they didn't do auto recommit for you when you don't even request for auto recommit? Did you get your money exactly on the same date it is written that your tenure ended.
Thanks as you share your experience.

my dear ur money drops into ur account on the day of maturity. u dont have to go anywhere or remind anyone, like clock work.

kingsilly:


I bank with UBA, my last two bid was successful, though they choose the rate

deepwater:


Thanks bro, which is better off, union bank or UBA

Union is very good.
Two successful bid at my personal chose rate

todayo:
Union is very good. Two successful bid at my personal chose rate

hope Union takes less than 1m

There was no OMO yesterday..

And if there is no call for OMO by 11.30 today, I will suggest we all reduce our rates in the Auction

feelamong:
There was no OMO yesterday..

And if there is no call for OMO by 11.30 today, I will suggest we all reduce our rates in the Auction

Thanks boss

yak:



hope Union takes less than 1m

Minimum of N100,000

for those you asking questions about MMF. pls I would advice you stick to treasury bills.
I have been monitoring FBN money market fact sheet for sometime now. Just recently I discovered that the their FUND SIZE is reducing drastically.
As at March they had about 94billion
As at Dec 2016, it has shrinked to 24billion naira
A drop of 70BILLION in about 9months. which translates that First bank MMF (money market) investors are pulling out funds at an average of 7billion naira per month.
if situation continues like this, with no new injection of funds. then the left over 24billion in thier fund size will have just 4months before problem sets in.

its no surprise why their desk officers are seriously persuading old customers with a whopping 16% just to win thier hearts. if you do FBN MMF, better port all funds now to TBILLS. the future isn't clear oooo

following

chukzyfcbb:
for those you asking questions about MMF. pls I would advice you stick to treasury bills.
I have been monitoring FBN money market fact sheet for sometime now. Just recently I discovered that the their FUND SIZE is reducing drastically.
As at March they had about 94billion
As at Dec 2016, it has shrinked to 24billion naira
A drop of 70BILLION in about 9months. which translates that First bank MMF (money market) investors are pulling out funds at an average of 7billion naira per month.
if situation continues like this, with no new injection of funds. then the left over 24billion in thier fund size will have just 4months before problem sets in.

its no surprise why their desk officers are seriously persuading old customers with a whopping 16% just to win thier hearts. if you do FBN MMF, better port all funds now to TBILLS. the future isn't clear oooo

I understand your concerns but please refrain from alarmist rhetoric.

It's pretty obvious that the fall in the assets under management (what you referred to as fund size) fell because of the prevailing economic issues. Even the stock market with the exception of a few stocks performed woefully. The last GDP figures showed that real estate activities have also fallen. That's what happens when disposable income falls. People are finding it difficult to save not to mention invest.

Please note that MMFs have TBs, tenured deposits and commercial papers as their underlying assets which generate cash-flows. So the higher the rates on TBs, the higher the MMF yields and vice versa. The 16% you mentioned is as a result of the high yields on TBs. Also, TBs and tenured deposits are assets that can be turned into cash fairly quickly ie TB can be sold on the secondary market and fixed deposits can be liquidated within a few days. They do not need constant inflows as they are not Ponzi schemes.

Sorry to digress a little. Did anyone attempt to transfer funds to zenith bank from another bank over the weekend? was it successful? I tried one from stanbic, I was debited by stanbic, but zenith didn't credit me, so I want to know if it's due to the network troubles zenith had recently. I've contacted the customer service of both banks. The stanbic guys are saying very confidently that they've pushed the funds to zenith, the zenith guys on the other hand are claiming that they could not have received the funds without crediting my account. please I need peeps here who are in the know to come to my aid as per what to do. Thanks.
P.S The transfer was done through quicktellar on an ATM. The money would have been enough for me to place a bid for tomorrow's auction.

double POST