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Treasury Bills and Bonds
Rank: Elder Joined: 2/16/2007 Posts: 2,114
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Kabando and Jaindi simply don't get it! The reason many "small investors" don't put money in T-Bills is NOT because they can't raise sh100k. It's because they don't know how to buy t-bills. In addition, the media [including the likes of Jaindi] have created the false impression that only banks with hundreds of millions of shillings can invest in t-bills. Secondly, the Jaindi-Kabando types have also created the false impression that t-bills are the highest interest earning deposits available. Again that is so untrue! If you ask me, if you don't have enough money to make a competitive t-bill bid, just put you money in an MMF. You'll get higher interest and you have access to your money withing 72hrs. With t-bills, you have to wait 12 weeks for the damn thing to mature![/quote] I agree.So who is supposed to educate the "small investors" how to invest in T-Bills?
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Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
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Chaka wrote:chiaroscuro wrote:
Kabando and Jaindi simply don't get it!
The reason many "small investors" don't put money in T-Bills is NOT because they can't raise sh100k. It's because they don't know how to buy t-bills. In addition, the media [including the likes of Jaindi] have created the false impression that only banks with hundreds of millions of shillings can invest in t-bills.
Secondly, the Jaindi-Kabando types have also created the false impression that t-bills are the highest interest earning deposits available. Again that is so untrue!
If you ask me, if you don't have enough money to make a competitive t-bill bid, just put you money in an MMF. You'll get higher interest and you have access to your money withing 72hrs. With t-bills, you have to wait 12 weeks for the damn thing to mature!
I agree.So who is supposed to educate the "small investors" how to invest in T-Bills? The issuer of the Bills & Bonds, a.k.a., GoK. However, as long as every week the CB is able to sell all Bills on offer at competitive rates, "everyone" is happy. We must not forget that the bills are not sold in order to give the public an opportunity to invest; they are sold to meet GoK cash-flow requirements. If GoK had required cash, it wouldn't bother selling the bills! So, in the end, we must ask the question: Why do we want "small investors" in the T-bill market? After all, the "small investors" can get better rates elsewhere!
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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MLF happening today.... possunt quia posse videntur
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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Rank: Member Joined: 5/6/2011 Posts: 391 Location: Nairobi
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Chaka , any idea on where to get more resources on investing in tbills? I see they say the 91 day bill has around 8% interest , does this mean you pay 8% less of whichever face value you invest in? "You can't have everything. Where would you put it?" - Stephen Wright
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Rank: Veteran Joined: 11/11/2006 Posts: 970 Location: Home
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Speculz wrote:Chaka , any idea on where to get more resources on investing in tbills? I see they say the 91 day bill has around 8% interest , does this mean you pay 8% less of whichever face value you invest in? The 8% is per annum. So what you'll get is 8/4 =approximately 2%. Read the thread below for more information. http://www.wazua.co.ke/forum.aspx?g=posts&m=399141
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Rank: Member Joined: 5/6/2011 Posts: 391 Location: Nairobi
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holycow wrote:Speculz wrote:Chaka , any idea on where to get more resources on investing in tbills? I see they say the 91 day bill has around 8% interest , does this mean you pay 8% less of whichever face value you invest in? The 8% is per annum. So what you'll get is 8/4 =approximately 2%. Read the thread below for more information. http://www.wazua.co.ke/forum.aspx?g=posts&m=399141 Gracias "You can't have everything. Where would you put it?" - Stephen Wright
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Rank: Member Joined: 1/10/2015 Posts: 411
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Kenya's central bank to sell 2-year, 10-year bonds in Feb - http://www.standardmedia...e/?articleID=2000150648 via @StandardKenya Your income is directly related to your philosophy, Not the economy.-Jim Rohn
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Rank: Member Joined: 10/14/2011 Posts: 661
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chiaroscuro wrote:Chaka wrote:chiaroscuro wrote:
Kabando and Jaindi simply don't get it!
The reason many "small investors" don't put money in T-Bills is NOT because they can't raise sh100k. It's because they don't know how to buy t-bills. In addition, the media [including the likes of Jaindi] have created the false impression that only banks with hundreds of millions of shillings can invest in t-bills.
Secondly, the Jaindi-Kabando types have also created the false impression that t-bills are the highest interest earning deposits available. Again that is so untrue!
If you ask me, if you don't have enough money to make a competitive t-bill bid, just put you money in an MMF. You'll get higher interest and you have access to your money withing 72hrs. With t-bills, you have to wait 12 weeks for the damn thing to mature!
I agree.So who is supposed to educate the "small investors" how to invest in T-Bills? The issuer of the Bills & Bonds, a.k.a., GoK. However, as long as every week the CB is able to sell all Bills on offer at competitive rates, "everyone" is happy. We must not forget that the bills are not sold in order to give the public an opportunity to invest; they are sold to meet GoK cash-flow requirements. If GoK had required cash, it wouldn't bother selling the bills! So, in the end, we must ask the question: Why do we want "small investors" in the T-bill market? After all, the "small investors" can get better rates elsewhere! Uhuru rejects mobile T-bill investmentThe proposed amendments were sponsored by Mukurwe-ini MP Kabando wa Kabando, but were referred back to the House on May 27. A memorandum to Parliament delivered to MPs by Speaker Justin Muturi advises them to delete sub-section two of clause two of the Bill. “It therefore follows that there will be no amendment to CBK Act and the Finance, Planning and Trade committee is guided accordingly,” Mr Muturi said. http://www.businessdaily...6/-/gby8pq/-/index.html
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Rank: Member Joined: 8/17/2007 Posts: 294
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Treasury has issued a 5yr bond. Considering the last 364day bill auction was priced at 12%, will the 5yr bond fetch higher rates? 17% would be nice... is this possible? experts please....
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Rank: Member Joined: 11/17/2009 Posts: 395 Location: Where everyone knows you
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@ instinct. I think it will fetch between 14 - 15 %
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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MatataMingi wrote:@ instinct. I think it will fetch between 14 - 15 % Too ambitious....12-12.75(conservative)...13-13.5 (aggressive) possunt quia posse videntur
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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maka wrote:MatataMingi wrote:@ instinct. I think it will fetch between 14 - 15 % Too ambitious....12-12.75(conservative)...13-13.5 (aggressive) Anything less than 13.5% and I would rather put my eggs in Post Bank Kenya, tax free! Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Member Joined: 11/17/2009 Posts: 395 Location: Where everyone knows you
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@ impunity. What would you get at Post Bank?
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Rank: Member Joined: 11/17/2009 Posts: 395 Location: Where everyone knows you
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Impunity wrote:maka wrote:MatataMingi wrote:@ instinct. I think it will fetch between 14 - 15 % Too ambitious....12-12.75(conservative)...13-13.5 (aggressive) Anything less than 13.5% and I would rather put my eggs in Post Bank Kenya, tax free! It came in at 13.92% - Not too bad!!
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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This month the Central Bank of Kenya offered a 9-year Treasury Bond for a total amount of up to Kshs 30 Billion. The total number of bids received was 719 amounting to Kshs 16.575 Billion. The weighted average rate for successful bids was 14.952%. IFB 9...undersubscribed big time. https://www.centralbank....s/9mortizedIFB1Bond.pdf
possunt quia posse videntur
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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maka wrote:This month the Central Bank of Kenya offered a 9-year Treasury Bond for a total amount of up to Kshs 30 Billion. The total number of bids received was 719 amounting to Kshs 16.575 Billion. The weighted average rate for successful bids was 14.952%. IFB 9...undersubscribed big time. https://www.centralbank....s/9mortizedIFB1Bond.pdf
Tax free and undersubscribed!?$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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hisah wrote:maka wrote:This month the Central Bank of Kenya offered a 9-year Treasury Bond for a total amount of up to Kshs 30 Billion. The total number of bids received was 719 amounting to Kshs 16.575 Billion. The weighted average rate for successful bids was 14.952%. IFB 9...undersubscribed big time. https://www.centralbank....s/9mortizedIFB1Bond.pdf
Tax free and undersubscribed!? Phunda ameshoka...mollis I sullenda! Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Member Joined: 2/7/2014 Posts: 155
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hisah wrote:maka wrote:This month the Central Bank of Kenya offered a 9-year Treasury Bond for a total amount of up to Kshs 30 Billion. The total number of bids received was 719 amounting to Kshs 16.575 Billion. The weighted average rate for successful bids was 14.952%. IFB 9...undersubscribed big time. https://www.centralbank....s/9mortizedIFB1Bond.pdf
Tax free and undersubscribed!? do we say lack of confidence? or people want better rates?...
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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MatataMingi wrote:@ impunity. What would you get at Post Bank? 13.5% Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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