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maka
#11 Posted : Wednesday, August 24, 2011 2:45:28 PM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
@ Hunderwear all bonds trading on the secondary market are now at a discount...a paper like 2/8/5 (around 2 years remaining) is trading @ 11.8-12% crazy rates...
possunt quia posse videntur
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Hunderwear
#12 Posted : Wednesday, August 24, 2011 3:20:38 PM
Rank: Member

Joined: 4/14/2011
Posts: 639
maka wrote:
@ amolo which 30 year are you talking about the re-opening?and what happens when you re disount at such a time when rates are way up e.g the 30 year is currently trading at around 15.5%

pardon my ignorance but does it mean that if I buy the 30yr bond worth 100k I get 15500 every year?
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Mach G
#13 Posted : Wednesday, August 24, 2011 4:18:09 PM
Rank: New-farer

Joined: 7/18/2011
Posts: 19
Yes - 15500 per year @15.5% interest but after taxes at 10% you get 13950 and since there will be two semi annual interest pmts you get 6975 every six months for 30 years
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Hunderwear
#14 Posted : Wednesday, August 24, 2011 5:05:48 PM
Rank: Member

Joined: 4/14/2011
Posts: 639
Mach G wrote:
Yes - 15500 per year @15.5% interest but after taxes at 10% you get 13950 and since there will be two semi annual interest pmts you get 6975 every six months for 30 years

and what are the costs involved in the bond investments,both in initial floating and in the secondary market?
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the deal
#15 Posted : Wednesday, August 24, 2011 6:53:19 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
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mauryc
#16 Posted : Wednesday, August 24, 2011 6:53:36 PM
Rank: New-farer

Joined: 11/21/2010
Posts: 50
Location: nairobi
how difficult is it to sell on the secondary market?i've heard of guys lamenting that they are unable sell..is there adequate demand?
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Hunderwear
#17 Posted : Wednesday, August 24, 2011 7:52:01 PM
Rank: Member

Joined: 4/14/2011
Posts: 639
[quote=the deal]Read something about bonds here http://www.contrarianinv...ard-by-toxic-bonds.html[/quote]
Am interested in the 30yr bond does it mean ths is the time to buy when the rate is high i.e 16.3%?Are they likely to go up or lower going forward
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the deal
#18 Posted : Wednesday, August 24, 2011 9:56:38 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
Hunderwear wrote:
[quote=the deal]Read something about bonds here http://www.contrarianinv...ard-by-toxic-bonds.html[/quote]
Am interested in the 30yr bond does it mean ths is the time to buy when the rate is high i.e 16.3%?Are they likely to go up or lower going forward

It depends weather you are buying the bond and holding it till maturity or for trading purposes...generally speaking bonds are trading at a discount to their face value at the moment...but if its for trading purposes u have to critically analyse the interest rates landscape least u r left holding a toxic bond like the banks..CBK is a master of mixed signals...
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Scooby
#19 Posted : Friday, August 26, 2011 12:57:53 AM
Rank: Member

Joined: 9/2/2006
Posts: 121
maka wrote:
@ Mach G thought withholding tax is 15 %??


Maka,

The with holding tax for any treasury bonds that are mauturies of ten years or more is 10%. This amendment was introduced by Uhuru Kenyatta about 2-3 years ago.
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Scooby
#20 Posted : Friday, August 26, 2011 1:15:24 AM
Rank: Member

Joined: 9/2/2006
Posts: 121
Mauryc,

Most bond investors buy bonds with the intention of holding them to maturity. So incase one needs to sell the bond, the broker will look to "match" it with another order to buy.

Once that is done, the transaction is then reflected on the stock exchange. It's a kinda weird arrangement compared to shares.

Regards
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  | | Edit by user: Friday, August 26, 2011 1:19 AM | Reason: Not specified
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