katamo:

"Nigeria’s central bank is printing money to keep the government afloat and alarms are ringing"

https://qz.com/1093002/nigerias-central-bank-emefiele-is-printing-naira-to-buhari-government-afloat/

Interesting article I came across which has implications for T-bill investors...

priscaver:


@ all, @emmanuelewumi, @Katamo , @kamade pls answer me. Still waiting for responses

abimbola01:



Auction Date
4/10/2017
4/10/2017
4/10/2017
Allotment / Issue Date
5/10/2017
5/10/2017
5/10/2017
Tenor
(91-Day)
(182-Day)
(364-Day)
Offer Amount (=N=)
28,693,915,000
33,490,874,000
68,184,887,000
Subscription (=N=)
12,369,538,000
49,920,435,000
465,731,963,000
Allotment (=N=)
11,769,538,000
12,229,639,000
106,370,499,000
Range of Bid Rates (%):
12.8950 – 16.9000
15.0000 – 17.3000
15.0000 – 18.8000
Stop Rates (%):
13.25
15.499
15.7253

priscaver:
Hello fellow investors I need your suggestions and advice please. I sold my shares up to 120k and told my brokers to reinvest in treasury bills but they said they are not into it. They suggested skuk and FGN bonds. Am not conversant with these investments my questions are
1. They said I can't buy TB on my own cept I have up to millions and I hear others talk of secondary makts here. Can that amount buy in sec mkts?
2. If am buying wit sec mkts must I go thru my brokers?

3. From the explanations and risks mentioned here do I go ahead and accept d 2year FGN bonds suggested by my brokers?

4. If an individual can buy TB in sec mkts do banks like GTB and UBA sell or its done only in some banks mentioned on this thread?

Thank you all as I look forward to your contributions

Odunharry:
. I doubt.
. For new subscribe
https://www.stanbicibtcbank.com/Nigeria/Individual/Saving-and-investing/Money-Market-Account

feelamong:


The One year rate is a JOKE...

feelamong:


The One year rate is a JOKE...

NL1960:


Before nko. Did you see the Offer, Subscription and Allotment amounts of 68,184,887,000, 465,731,963,000 and 106,370,499,000?.

katamo:


If CBN continues to print large amounts of money to support government borrowing, it will result in even higher levels of inflation. With higher levels of inflation, the real rate of return (nominal rate - inflation rate) will decrease. T-bill rates should adjust to reflect inflation in the medium term so bit better than longer term bonds.

Anyone looking to invest in longer term bonds like the FGN or sukuk bonds need to consider inflation risk before they lock in their funds for the long term.

NL1960:


Before nko. Did you see the Offer, Subscription and Allotment amounts of 68,184,887,000, 465,731,963,000 and 106,370,499,000?.

Santino1:


You self dey see am. I'll spend the weekend getting myself acquainted with your crypto thread. Expect some surge in traffic to that thread

Santino1:


Yeah. Oversubscribed by almost seven times. That's some scary stuff.

Santino1:
Holy crap!!! At the rate the stop rate is going down, it'll soon discover oil. Time to start reassessing my investment options.

feelamong:


The One year rate is a JOKE...

feelamong:


where were you when we were buying 364 days Tbills at 9% some moons ago?

unite4real:


Its not a joke. Look at demand and supply. Well, just like feelamong stated, we have been there when rates were 9%. I have even bought far below 9% in the past. The reason i have always referred to the over 18% as happy times. Just swallow the pills, for happy times are over but may come again sometimes in the future.

Santino1:




You guys are right. Seems party time is over.

The FGN bond at 14.8% is starting to look like a good idea now.

zamirikpo:
@ 15% we are not still doing badly......unless it drops below 12%.

my risk endurance ratio is very very low. I cannot fit to take risk with years of savings. 7yrs exactly.

U1:


Nice point, sir. But no matter how bad it gets, TB will always be better than leaving your money in the bank insofar as you will get your money back.

katamo:


Agreed. You will essentially be losing money if you leave it in a bank account as the interest you will get will be lower than the inflation rate.

Here are a couple of ways for people in the group to brace for higher inflation:

1. Stay away from long-term fixed income investments - T-bills will be fine because rates will adjust upwards to account for inflation.

2. Real estate is usually the best asset to invest in in times of high inflation, and often sees its greatest price appreciation during such periods.

3. Invest in sectors of the stock market that benefit from inflation including energy/oil, food, building materials etc.

4. Invest in gold and other precious metals.

Other in the group, feel free to add to this!

Mup4life:
How do one invest in gold and other precious metals?

katamo:


Agreed. You will essentially be losing money if you leave it in a bank account as the interest you will get will be lower than the inflation rate.

Here are a couple of ways for people in the group to brace for higher inflation:

1. Stay away from long-term fixed income investments - T-bills will be fine because rates will adjust upwards to account for inflation.

2. Real estate is usually the best asset to invest in in times of high inflation, and often sees its greatest price appreciation during such periods.

3. Invest in sectors of the stock market that benefit from inflation including energy/oil, food, building materials etc.

4. Invest in gold and other precious metals.

Other in the group, feel free to add to this!

katamo:


Agreed. You will essentially be losing money if you leave it in a bank account as the interest you will get will be lower than the inflation rate.

Here are a couple of ways for people in the group to brace for higher inflation:

1. Stay away from long-term fixed income investments - T-bills will be fine because rates will adjust upwards to account for inflation.

2. Real estate is usually the best asset to invest in in times of high inflation, and often sees its greatest price appreciation during such periods.

3. Invest in sectors of the stock market that benefit from inflation including energy/oil, food, building materials etc.

4. Invest in gold and other precious metals.

Other in the group, feel free to add to this!

Alikote:
my friend that refuse to invest in tb and build a house for 50 m and place it for sale @ 70 m has not been able to sell for 2 year now even at 55 m no buyer ....during the boom he built houses for 35 m and sold some for 55 m

katamo:


You can invest in exchange traded funds that invest directly in actual gold or gold stocks. Here is one that used to trade on Nigerian stock exchange from Absa, the South African bank, that buys actual. (Caveat: This is not a recommendation! Just meant to give you an idea of what gold ETFs do).

http://etfcib.absa.co.za/Fund%20Documents/NewGold%2030062017.pdf

One other option I forgot to mention is to convert your cash to other currencies and think about investing in non-naira denominated assets as inflation will result in the naira falling against other currencies.

Santino1:




You guys are right. Seems party time is over.

The FGN bond at 14.8% is starting to look like a good idea now.