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Treasury Bills and Bonds
Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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Chaka wrote:Swenani wrote:
Both are not applying, In the above, the coupon rate is 12% while the discount is the difference between par value-market value
Both the zero coupon and coupon bonds can have a discount and vice versa is also true depending on the yield rate
If there is a coupon rate and a discount, then both are applying?In which case, this thing should be called a "hybrid" bond?To me it appears that this bond biz has been made mysterious to discourage small timers from investing therein? True...labia. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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Impunity wrote:Chaka wrote:Swenani wrote:
Both are not applying, In the above, the coupon rate is 12% while the discount is the difference between par value-market value
Both the zero coupon and coupon bonds can have a discount and vice versa is also true depending on the yield rate
If there is a coupon rate and a discount, then both are applying?In which case, this thing should be called a "hybrid" bond?To me it appears that this bond biz has been made mysterious to discourage small timers from investing therein? True...labia.  Meant "True...kabisa"  F*ck autocorrect. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 12/7/2012 Posts: 11,901
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Impunity wrote:Impunity wrote:Chaka wrote:Swenani wrote:
Both are not applying, In the above, the coupon rate is 12% while the discount is the difference between par value-market value
Both the zero coupon and coupon bonds can have a discount and vice versa is also true depending on the yield rate
If there is a coupon rate and a discount, then both are applying?In which case, this thing should be called a "hybrid" bond?To me it appears that this bond biz has been made mysterious to discourage small timers from investing therein? True...labia. Meant "True...kabisa" F*ck autocorrect. Shows where your mind was/is  In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: User Joined: 8/15/2013 Posts: 13,236 Location: Vacuum
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Chaka wrote:Swenani wrote:
Both are not applying, In the above, the coupon rate is 12% while the discount is the difference between par value-market value
Both the zero coupon and coupon bonds can have a discount and vice versa is also true depending on the yield rate
If there is a coupon rate and a discount, then both are applying?In which case, this thing should be called a "hybrid" bond?To me it appears that this bond biz has been made mysterious to discourage small timers from investing therein? Maybe we should define what a "coupon" and "discount" are. We also need to define and standardize the use of the word "hybrid"...Where I come from, when somebody says hybrid bond it refers to a bond which can be converted to equity If Obiero did it, Who Am I?
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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Angelica _ann wrote:Impunity wrote:Impunity wrote:Chaka wrote:Swenani wrote:
Both are not applying, In the above, the coupon rate is 12% while the discount is the difference between par value-market value
Both the zero coupon and coupon bonds can have a discount and vice versa is also true depending on the yield rate
If there is a coupon rate and a discount, then both are applying?In which case, this thing should be called a "hybrid" bond?To me it appears that this bond biz has been made mysterious to discourage small timers from investing therein? True...labia. Meant "True...kabisa" F*ck autocorrect. Shows where your mind was/is Weeee wacha, na vile ulikatalia na contacts zako! Been thinking of you anyway.Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Veteran Joined: 11/14/2006 Posts: 1,311
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Chaka wrote:Swenani wrote:
Both are not applying, In the above, the coupon rate is 12% while the discount is the difference between par value-market value
Both the zero coupon and coupon bonds can have a discount and vice versa is also true depending on the yield rate
If there is a coupon rate and a discount, then both are applying?In which case, this thing should be called a "hybrid" bond?To me it appears that this bond biz has been made mysterious to discourage small timers from investing therein?
@Chaka, sorry I've been quite busy and unable to respond.
Swenani is right..... This is what happens;
The government can decide to sell a bond with a coupon rate or one without coupon rate. For the later the bidding process discovers the coupon rate as the market yield rate becomes the coupon rate on the first day ....also known as the value date of the bond.
In the case where a coupon rate is given as part of the bond, the bidding process will discover the price of that bond and this maybe at a premium or at discount depending on the market forces.
The coupon rate whether given by the CBK or discovered by the market is what is used to compute the interest to be paid periodically on the bonds.
Please note that the market yield rate may change every day as the bonds are traded in the market, depending on the prices buyers and sellers are ready to pay or accept,......but the coupon rate remains the same.
This happens the world over....it is not a Kenya ("Jubilee") government issue.....you may just need to read further about how bonds work and there are lots of materials online and books to explain how these work.
I hope I've not made you more confused now....lol
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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Liv wrote:Chaka wrote:Swenani wrote:
Both are not applying, In the above, the coupon rate is 12% while the discount is the difference between par value-market value
Both the zero coupon and coupon bonds can have a discount and vice versa is also true depending on the yield rate
If there is a coupon rate and a discount, then both are applying?In which case, this thing should be called a "hybrid" bond?To me it appears that this bond biz has been made mysterious to discourage small timers from investing therein?
@Chaka, sorry I've been quite busy and unable to respond.
Swenani is right..... This is what happens;
The government can decide to sell a bond with a coupon rate or one without coupon rate. For the later the bidding process discovers the coupon rate as the market yield rate becomes the coupon rate on the first day ....also known as the value date of the bond.
In the case where a coupon rate is given as part of the bond, the bidding process will discover the price of that bond and this maybe at a premium or at discount depending on the market forces.
The coupon rate whether given by the CBK or discovered by the market is what is used to compute the interest to be paid periodically on the bonds.
Please note that the market yield rate may change every day as the bonds are traded in the market, depending on the prices buyers and sellers are ready to pay or accept,......but the coupon rate remains the same.
This happens the world over....it is not a Kenya ("Jubilee") government issue.....you may just need to read further about how bonds work and there are lots of materials online and books to explain how these work.
I hope I've not made you more confused now....lol
So for this particular Bond, suppose it didnt have the pre-determined coupon of 12%, so the value date Yield of 13.177% would have been used for payments for the entire period the Bond? Even even the yield at sometimes was to rise to 15%, the 6-monthly payment would still be pegged on 13.177% and vice versa if it were to fall to say 9%...kweli rongo? Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Impunity wrote:Liv wrote:Chaka wrote:Swenani wrote:
Both are not applying, In the above, the coupon rate is 12% while the discount is the difference between par value-market value
Both the zero coupon and coupon bonds can have a discount and vice versa is also true depending on the yield rate
If there is a coupon rate and a discount, then both are applying?In which case, this thing should be called a "hybrid" bond?To me it appears that this bond biz has been made mysterious to discourage small timers from investing therein?
@Chaka, sorry I've been quite busy and unable to respond.
Swenani is right..... This is what happens;
The government can decide to sell a bond with a coupon rate or one without coupon rate. For the later the bidding process discovers the coupon rate as the market yield rate becomes the coupon rate on the first day ....also known as the value date of the bond.
In the case where a coupon rate is given as part of the bond, the bidding process will discover the price of that bond and this maybe at a premium or at discount depending on the market forces.
The coupon rate whether given by the CBK or discovered by the market is what is used to compute the interest to be paid periodically on the bonds.
Please note that the market yield rate may change every day as the bonds are traded in the market, depending on the prices buyers and sellers are ready to pay or accept,......but the coupon rate remains the same.
This happens the world over....it is not a Kenya ("Jubilee") government issue.....you may just need to read further about how bonds work and there are lots of materials online and books to explain how these work.
I hope I've not made you more confused now....lol
So for this particular Bond, suppose it didnt have the pre-determined coupon of 12%, so the value date Yield of 13.177% would have been used for payments for the entire period the Bond? Even even the yield at sometimes was to rise to 15%, the 6-monthly payment would still be pegged on 13.177% and vice versa if it were to fall to say 9%...kweli rongo? You are catching up possunt quia posse videntur
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Rank: Veteran Joined: 4/4/2016 Posts: 1,996 Location: Kitale
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Yesterday i went to CBK to open their cds account.I filled the mandate form after taking it to my bank for authentification.Afterwards,was told to wait for one week for email communication. Why does it take long to open a cds with cbk? When is the latest i could start investing in bonds? Towards the goal of financial freedom
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Rank: Member Joined: 7/3/2014 Posts: 245
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Ebenyo wrote:Yesterday i went to CBK to open their cds account.I filled the mandate form after taking it to my bank for authentification.Afterwards,was told to wait for one week for email communication.
Why does it take long to open a cds with cbk?
When is the latest i could start investing in bonds?
Expect to wait 30-120days or @maka/mawinder can get you access to insiders who can process within a few days. In the world of securities, courage and patience become the supreme virtues after adequate knowledge and a tested judgment are at hand.
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Rank: Veteran Joined: 11/2/2006 Posts: 1,206 Location: Nairobi
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TheGeek wrote:Ebenyo wrote:Yesterday i went to CBK to open their cds account.I filled the mandate form after taking it to my bank for authentification.Afterwards,was told to wait for one week for email communication.
Why does it take long to open a cds with cbk?
When is the latest i could start investing in bonds?
Expect to wait 30-120days or @maka/mawinder can get you access to insiders who can process within a few days. Takes about 40days....reason....unknown. Formally employed people often live their employers' dream & forget about their own.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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bird_man wrote:TheGeek wrote:Ebenyo wrote:Yesterday i went to CBK to open their cds account.I filled the mandate form after taking it to my bank for authentification.Afterwards,was told to wait for one week for email communication.
Why does it take long to open a cds with cbk?
When is the latest i could start investing in bonds?
Expect to wait 30-120days or @maka/mawinder can get you access to insiders who can process within a few days. Takes about 40days....reason....unknown. Si just crap this are some of the things that need to be changed plus secondary trading for retailers....Hell on earth if you have not mastered it Utaumia... This month reopen of FXD3.2007.15 and FXD1.2008.20 https://www.centralbank....ry-bonds/#treasury_bondspossunt quia posse videntur
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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Some time back,there was a rule that once you get a CBK CDS account,it has to be used during the next 12 months or else it lapses,i.e you loose it.Is this still the case?
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Rank: Member Joined: 8/25/2015 Posts: 839 Location: Kite
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Chaka wrote:Some time back,there was a rule that once you get a CBK CDS account,it has to be used during the next 12 months or else it lapses,i.e you loose it.Is this still the case? Good Q,got mine 2013, is it still valid?
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Rank: Member Joined: 5/6/2011 Posts: 391 Location: Nairobi
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Taurrus wrote:Chaka wrote:Some time back,there was a rule that once you get a CBK CDS account,it has to be used during the next 12 months or else it lapses,i.e you loose it.Is this still the case? Good Q,got mine 2013, is it still valid? Short of walking to CBK and asking, emails are never answered. It would be great if they could automate most of this. "You can't have everything. Where would you put it?" - Stephen Wright
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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The short answer is that yes your CDS account expires if its dormant for 12 months i.e. no transaction and there is no balance. I had a contact in the debt team but she left. Speculz wrote:Taurrus wrote:Chaka wrote:Some time back,there was a rule that once you get a CBK CDS account,it has to be used during the next 12 months or else it lapses,i.e you loose it.Is this still the case? Good Q,got mine 2013, is it still valid? Short of walking to CBK and asking, emails are never answered. It would be great if they could automate most of this. Sehemu ndio nyumba
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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Mainat wrote:The short answer is that yes your CDS account expires if its dormant for 12 months i.e. no transaction and there is no balance. I had a contact in the debt team but she left. Speculz wrote:Taurrus wrote:Chaka wrote:Some time back,there was a rule that once you get a CBK CDS account,it has to be used during the next 12 months or else it lapses,i.e you loose it.Is this still the case? Good Q,got mine 2013, is it still valid? Short of walking to CBK and asking, emails are never answered. It would be great if they could automate most of this. So if I have a 10 year Bond at CBK and and I dont do any trading within the period, my account will be active? Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Member Joined: 1/1/2010 Posts: 511 Location: kandara, Murang'a
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Know what else would be nice, a till no or a paybill for Wanjikus like me Foresight..
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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Yes Impunity wrote:Mainat wrote:The short answer is that yes your CDS account expires if its dormant for 12 months i.e. no transaction and there is no balance. I had a contact in the debt team but she left. Speculz wrote:Taurrus wrote:Chaka wrote:Some time back,there was a rule that once you get a CBK CDS account,it has to be used during the next 12 months or else it lapses,i.e you loose it.Is this still the case? Good Q,got mine 2013, is it still valid? Short of walking to CBK and asking, emails are never answered. It would be great if they could automate most of this. So if I have a 10 year Bond at CBK and and I dont do any trading within the period, my account will be active? Sehemu ndio nyumba
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Rank: Elder Joined: 12/7/2012 Posts: 11,901
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http://mobile.nation.co....448504-im1n6g/index.htmlIn the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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