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Interest rates US vs. Kenya
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Scubidu
#21 Posted : Monday, January 25, 2010 10:33:36 AM
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Joined: 9/4/2009
Posts: 700
Location: Nairobi
kizee. If I'm a bond trader, trading about Ksh500 mn daily on the NSE, should I take a Ksh100 mn loan from a bank and see if I can make more money from secondary trading?
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“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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kizee
#22 Posted : Monday, January 25, 2010 11:19:20 AM
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that wud eb a gud idea...as long as rates are falling
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mukiha
#23 Posted : Monday, January 25, 2010 11:34:57 AM
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Joined: 6/27/2008
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@Scubidu; The Bond market is very sluggish at the NSE. You could buy a bond and not get buyyers for several moths!

So far today, there has only been activity on three Bonds and only 15 deals concluded.
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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VituVingiSana
#24 Posted : Monday, January 25, 2010 11:47:48 AM
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Joined: 1/3/2007
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Location: Nairobi
kizee wrote:
vvs

i dont thnk the bond is USD denominated...its an NGN bond but the holder has the option of receivin coupons in USD to avoid ccy risk...its a structured product as it were...i dont think nigeria has dun a Eurobond yet so this is the only explanation i cud think off


But in what currency do u get paid back the Principal? If in NGN, then you face CCY risk.

Are the coupons in US$ fixed or based on the current forex rate coz then CCY still applies.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Scubidu
#25 Posted : Monday, January 25, 2010 12:21:59 PM
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Joined: 9/4/2009
Posts: 700
Location: Nairobi
mukiha. The turnover last week was about 7bn and 113 deals according to NSE, I thot the market was doing pretty well.

kizee. What did you mean by 'as long as rates were falling'?
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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VituVingiSana
#26 Posted : Monday, January 25, 2010 12:29:41 PM
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@scubidu - When rates fall the bond prices (generally) rise. The greater the duration, the greater the rise..
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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kizee
#27 Posted : Monday, January 25, 2010 12:50:44 PM
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But in what currency do u get paid back the Principal? If in NGN, then you face CCY risk.

Are the coupons in US$ fixed or based on the current forex rate coz then CCY still applies

u get paid in ur desired currency...the fx risk is taken away by the seller of the bond and thats why its a structured product
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VituVingiSana
#28 Posted : Monday, January 25, 2010 12:58:26 PM
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Wow... if I can get that rate in US$ for a Nigerian sovereign bond... sign me up...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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kizee
#29 Posted : Monday, January 25, 2010 5:31:17 PM
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lol...u def wont get the NGN yield but a step up from usd yields...the writer of the option also needs to put bread on the table..lol
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