@scooby. Kibaks is launching trading HF bond. Seven year treasuries going at about 8% (I think)...should I be interested in buying? Cos I have a feeling no one will be willing to sell to me...

@dkuyoh. How does one construct a bond index? This sounds interesting...

@drake
and it flopped badly coz of the complexity involved. the thing with bonds in Kenya is that they arent traded as much as shares (most bondholders hold to maturity). Even with the ATS which makes trading more efficient only a relatively small number of bonds are traded in a day or week. some bonds have embedded options which makes them difficult to value, others are mature and we also have on the run issues so the index will have to be reconstituted regularly.

@ scooby ...good point.spot on. thats exactly what i said! If one can use the 7yr spot rates as a benchmark you can estimate the yield but you have to add a risk premium for volatility, credit risk, reinvestment risk etc. how will the value start to decline after crossing the 6.5% yield mark? coz the cap is at 9.5% explain

Scubidu,

There is nothing you are loosing by trying, right? So, go ahead and take a chance...

And I'll let you know if I know someone who bought and is interested in selling their bond, or a portion of it.

Cheers

@polymer1. They need a way to bring smaller players into the market and not get screwed on pricing ... but i think market information will become more available (in time) with better investment.

@scubidu They can bring in retail investors who will buy and hold as bond trading is predominantly a big pockets-specialised knowledge game everywhere in the world.