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Re: Bonds Investors Hub by cooldudeng(m): 11:25pm On May 29, 2018 |
The below rate schedule was culled from an investment bank mail as at last week. It will be great if someone can help share more light on the below Bond Tenor (Years) Offer (%) Coupon Rate (%) Implied Price (N) Feb-20 2 12.50 15.54 104.55 Jul-21 3 13.40 14.50 102.71 Jan-22 4 13.35 16.39 108.57 Mar-24 6 13.40 14.20 103.11 Jan-26 8 13.30 12.50 96.18 Mar-27 9 13.40 16.29 114.64 Jul-34 16 13.20 12.15 93.01 Mar-36 18 13.25 12.40 94.19 Apr-37 19 13.20 16.25 121.01 Using the Feb - 20 bond as an example, I would like to really understand how the bond work Below is my basic understand and do correct me if I'm wring " This is a bond that must have been issued at a unit price of N100 on March 2018 (since tenor is 2 years) " Coupon rate is 15.54% meaning, N15.54 will be paid in a year per each unit held. This I believe will now be bi-annually at N7.77 with the first payment due in August ( 6 months after) " For one to buy into it now, you will have to buy at the implied price of N104.55 per unit, hence at a premium What then does the offer (%) mean? Are all my assumptions above correct? 1 Like |
Re: Bonds Investors Hub by C4Ltd: 12:59am On May 30, 2018 |
awesomeJ:true |
Re: Bonds Investors Hub by awesomeJ(m): 1:21am On May 30, 2018 |
cooldudeng:All your assumptions are very correct sir. The offer (%) should be the yield to maturity. I will try to crunch the numbers tomorrow to show how the implied price was obtained. 1 Like |
Re: Bonds Investors Hub by FoddsCapital: 8:31am On May 30, 2018 |
We offer unparalleled return on investment. Enquire from us today. |
Re: Bonds Investors Hub by cooldudeng(m): 10:36am On May 30, 2018 |
awesomeJ: Thanks! Would be looking forward to it. What is the offer % about? |
Re: Bonds Investors Hub by engrkaz(m): 6:10am On May 31, 2018 |
awesomeJ:That's the minimum investment for stanbicibtc money market, which of course invests in Bonds, Certificate of deposits, Tbills and other government instruments. When I subscribed, it was 100k minimum. I got a mail from them around last year that they've reduced it to 5k. 1 Like |
Re: Bonds Investors Hub by gantic: 6:33am On May 31, 2018 |
Kolping: Most firms would allow you access to Dollars at the interbank rates for purchase of Eurobonds. Typically $200k but some would allow you buy into a pool alongside other investors. Illiquid if you do not have a full $200k investment because of complexities trying to pull out your share of the pool. Good to hedge against FX movement if you have future foreign outlay planned for education etc.etc. 1 Like |
Re: Bonds Investors Hub by ernie4life(m): 7:03am On May 31, 2018 |
Nice thread, I feel bad that am just seeing this thread now 1 Like |
Re: Bonds Investors Hub by Agbeni33: 7:45am On May 31, 2018 |
Good morning to you all. This is a nice thread. Have been following a thread called ''Treasury bill in Nigeria'' because am interested in investing my money in it. My concern now is that I need vivid explanations and clarifications on FGN Bond and Treasury Bill in Nigeria. Like how to invest, maturity period(s), rate of return, the investment rate, minimum amount to start with,and best bank to trade with in both FGN Bond and Treasury Bill in Nigeria. Thanks. 2 Likes |
Re: Bonds Investors Hub by Ugosample(m): 7:59am On May 31, 2018 |
engrkaz: Are you saying that the minimum amount needee to invest in Stanbic IBTC bond fund is 5k? |
Re: Bonds Investors Hub by mdgreen(m): 8:06am On May 31, 2018 |
Hello to all the investors in house, I really want to know the best investment to involve into between stanbic mutual funds, fgn bonds and tbill, really want to make some cool money since business right now is not stable due to the economic. Lastly what I don't understand about fgn bonds, if I apply for the five years bond,it mean I will be paid instanct interest of the five years or yearly interest paid to me, or I have to choose how I can get my interest either monthly, quarterly, or yearly.? |
Re: Bonds Investors Hub by spenca: 8:08am On May 31, 2018 |
gantic: Most people make the blunder of hedging FX rate and do not see the fact that most banks and nigeria as a whole does not only have the problem of rate but often the problem of liquidity. You may hedge your rates with a bank say AAA bank for 360 for a period of a year but when the time comes to activate your policy they tell you they do not have liquid dollar to effect the transaction. Why do you think CBN has been enforcing banks to sell FX to the customers and walk in? Artificial scarcity. 1 Like |
Re: Bonds Investors Hub by spenca: 8:09am On May 31, 2018 |
mdgreen: If you read from the first page you will find this information there |
Re: Bonds Investors Hub by MabraO: 8:33am On May 31, 2018 |
Too many big big grammar on here. Op don’t forget there re people who are hearing this for the first time. Me think this thread is targeted at those who know about this bond investment.. I was expecting some basics for new beginners, minimum amount someone knowing about it can start with not the 50m and $200k, 9m flying around. Does it mean a poor man can’t invest in FGN bond or state bond? 8 Likes 1 Share |
Re: Bonds Investors Hub by ebhohon: 9:35am On May 31, 2018 |
interesting topic. but it will be interesting if anyone that has practical experience on it to enlighten us. thanks. |
Re: Bonds Investors Hub by ernie4life(m): 9:38am On May 31, 2018 |
MabraO: let me help you out. Bonds are long term investments that usually last for more than a year. There are different types of bonds depending on who is offering the bond and in what denominations example FGN bonds FGN savings bonds Euro bonds(offered in dollars) but I think for this thread we are dealing with only FGN bonds not FGN savings bonds Usually with a s little as 10k you can buy naira bonds. Bonds pay a coupon which you can call interest. usually this coupons are paid twice a year, so lets say you buy 10k worth of 5 years FGN bonds at a coupon of 12% per year that means every 6 months you will be paid 6k which represents 12% per year for the next 5 years, after the 5 years you will get back your 10k where can you buy bonds? banks, stockbrokers and asset management firms. log on to www.sec.gov.ng to see full list Bonds are sold in two market, primary and secondary markets. what if you want your money back before the end of the 5 years? sure you can have your money back, it would be sold to some other person who wants. let me stop here oga,s in the house should continue , can someone else open a thread for Euro bonds and copy me please 12 Likes 2 Shares |
Re: Bonds Investors Hub by MabraO: 9:52am On May 31, 2018 |
ernie4life: Thanks very much With this ur explanation I really understood it now It means I ll go to my bank and invest From wot I read earlier in the post I got confused |
Re: Bonds Investors Hub by daewoorazer(m): 10:35am On May 31, 2018 |
Please experienced peeps, Which is the best? Eurobond, FGN bond et al?? I’m new here and this sounds promising |
Re: Bonds Investors Hub by sefani(f): 10:45am On May 31, 2018 |
Nice thread. can someone be kind enough to explain how I can buy an FG bond of 100k from the secondary market for 5 years and what my interest per year will be. I am a newbie please 1 Like |
Re: Bonds Investors Hub by awesomeJ(m): 1:07pm On May 31, 2018 |
daewoorazer:My personal opinion is: When the naira is stable, and outlook seems favourable for it, I'd choose FGN bonds, because of the superior returns. However when oil prices start taking a dip, our output levels suffer considerable declines and reserves and braking new lows, then I know a currency trouble is imminent, so I'd choose Eurobonds for their huge revaluation gains prospects. Every investment vehicle has its right season. 4 Likes 1 Share |
Re: Bonds Investors Hub by awesomeJ(m): 1:14pm On May 31, 2018 |
sefani:For bonds, what you should really ask is what your returns would be. Let's say, you buy a bond with a face value of N1000 and 16% coupon at a 12% yield, you will get interests of 160,000 yearly on every 1000 units you hold. But what you'd pay to get those 1000 units would me more than 1m (which should be the normal cost) You'd rather be paying 1.33m to get interest of 160k per year. So if you could get bonds with 100k at say 13.5% yield, your returns would be #13500 every year. 2 Likes |
Re: Bonds Investors Hub by awesomeJ(m): 1:19pm On May 31, 2018 |
cooldudeng:The offer (%) is the quoted yield on the bond. For instance, the Feb 2020 bond has a coupon of 15.54%, but a yield of 12.5%. The implication of that is. For someone who is buying at that quoted yield, his annual returns would be 125,000 on every 1m investment, because he bought the bond at a premium price (104.55) whereas for those who bought at the face value (100), they would get 155,400 on the same 1m investment. 1 Like |
Re: Bonds Investors Hub by awesomeJ(m): 1:24pm On May 31, 2018 |
For those of us asking about how to start, i've been trying since Tuesday to reach Vetiva Capital. Phones keep ringing, nobody picks up. 01 270 0657 01 270 0658 01*271*9570 Those are their phone lines. Anyone else could ring them, and help ask. I'll be at an FBN branch later today as well, maybe I'll find some useful info. 1 Like |
Re: Bonds Investors Hub by awesomeJ(m): 1:34pm On May 31, 2018 |
cooldudeng:So this is what I've come up with so far: The yield y of a bond is: y=((C+G)/P)*100 Where C is the annualized coupon receipts, P is the purchase price. G is the annualized price gains(capital gains) gotten from F-P, where F is the face value. To get the annualized coupon payment, divide the total expected coupon receipts by the term to maturity (in years) To get the annualized capital gains, divide the total gains by the term to maturity (in years) I'll use two examples in my next post to illustrate-a hypothetical case, and a real instance from results published on the DMO's site. You may need to read this post again alongside the examples in the next post. Thank you. 3 Likes |
Re: Bonds Investors Hub by awesomeJ(m): 1:55pm On May 31, 2018 |
So case 1: FGN 16.00 FEB 2021 bond to be purchased in May 2018 at an offer price(dirty) of 950 per unit. What's the yield? Things we already know: Face value of an FGN bond, F= 1000. Coupon payment dates will be in August and February of each year. Thus, total number of coupon receipts to maturity = 6 ( Aug'18, Feb'19, Aug'19, Feb'20, Aug'20 and Feb'21) Total coupon receipts = (80.00*6) = 480 (at 16%, coupons'll be 80 every six months) Total capital gains = F-P (1000-950) = 50. Term to maturity= 2 years, 9months (May'18-Feb'21) =2.75yrs. Annualized coupon = 480/2.75=174.55 Annualized price gains= 50/2.75=18.18 I.e C=174.55 G=18.18 Therefore yield y= ((174.55+18.18)/950)*100% y=20.29% 3 Likes |
Re: Bonds Investors Hub by evalasthn: 3:01pm On May 31, 2018 |
Thank you so much guys for this thread especially awesomeJ. I recently started money market investment with Stanbic ibtc bank (after dragging my feet for some months) and I must say it's really good. With an investment of 3m i get about 1k everyday which is added back to the total investment and re-invested again yielding higher income. percentage return is about 12-14% depending on the market price. And I can start withdarwing from the account with full proceeds after one month My question now is, what kind of investment is this? is it Bond, TB, Eurobond Is their any better bank investment than this? Do you guys think this is really a good investemt because the marketer that sold this to me made me understand that its the best i cant get out there. I plan on increasing higher than 3m but after reading this thread am dragging my feet again 2 Likes |
Re: Bonds Investors Hub by awesomeJ(m): 3:32pm On May 31, 2018 |
cooldudeng:So I've used the figures you posted earlier, but the yields are got are not exact. I thought perhaps the figures were published on a date different from my assumption, so I decided to use figures from the DMO's site, still, there's a slight difference. So I there's still something missing from my analysis. Maybe I'll find it, or maybe someone else here will. The latter is more convenient for me. |
Re: Bonds Investors Hub by awesomeJ(m): 3:40pm On May 31, 2018 |
evalasthn:With regards to difference in yields, bonds currently beat MMFs by less than 1%. So given the redemption and subscription flexibilities with MMFs, switching to bonds may not be worth the stress for now. But a time will come when that difference reaches 3-5%, then bonds'll certainly be best. |
Re: Bonds Investors Hub by Tex42(m): 4:39pm On May 31, 2018 |
The creator of this thread must be a mind reader. Thread came just about the time I needed info on this bonds. Really considering investing... Gr8 thread. 1 Like |
Re: Bonds Investors Hub by akinola98: 5:42pm On May 31, 2018 |
awesomeJ: I called my sharebrokers ( GTI) to purchase FGN bond from the secondary market but I was amazed when I was informed the minimum amount to buy is 100M naira Is that right across the board I know the minimum for primary market is 50M but never knew it was higher for secondary market Anybody with ideas please? |
Re: Bonds Investors Hub by DonroxyII: 8:33pm On May 31, 2018 |
awesomeJ:Gawd, u are really helping my Strategic Financial Management knowledge !! 1 Like |
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