CBK has launched its longest bond yet for 30yrs. I think its a good idea and is the sort of thing banks thinking of going into the mortgage market should be looking to do.

However, I think its the interest rate is on the low side.

Your views?

wendz...the lock in period is 30 years lol...tho u cud sell it on the secondary market

Guys,

I think the return is not as bad at it seems. Look at it this way, what other options do you have that you can invest and be quiet while earning for 30 years. The main option is real estate as in rental property. You get land, put up a building and rent it out. Now a quarter an acre will cost you about 5M bob in a good location.( Ruaka, Jamhuri etc)Then, put up about 25M to put up a buiding that will bring you about 350K pm in rent. i.e Kshs4.2M p.a assuming 100% occupancy and pay rate.i.e is a 14% return on investment.

Now, other than the capital gains on the property, why would I go into all the hullabaloo of sourcing land, getting approvals, building etc for and extra 2% returns?

My three pence...

Maybe all these insurance cum investment companies can put investors money there and start giving better returns than the insulting 8%pa.

I think it's a very wise investment if you have kids in school. Imagine if you invest 2m, you'll be set for school fees for 2 kids in a good private primary school.

Does anybody know the current life expectancy in Kenya, it was 45 yrs a while ago. Whatever it is, subtract 30 and get the age of the guys (individuals)who should be investing in that bond!
Just wish I had put more money in the Kengen Bond!

Like someone has just said the Insurance Cos. will buy the bond using our money and give us 8% p.a. But hey it's a Capitalist world where there's always a greater fool.

I think its a better option than the Insurance Products being hawked all over. The interest should have atleast been 15%, atleast given the duration.

12% return isnt that bad lets say u buy those NHC house @ 5.5 million with rental income of between 30 - 40k a month thts around 360k to 480 k per year invest that same amount in the bond you will be receiving a return of 660k even if u remove tax its way better than buying the house...

You know, there's a greater probability that in the next 30yrs, you could buy that bond at 90 and a slight probability that you could also buy it at 80. Now if your patient and you consider getting good returns for your shilling. I think you could wait and buy it over the next 30 yrs at say 80. Markets can be irrational.