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BRITAM Bond
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kiash
#1 Posted : Thursday, June 19, 2014 3:26:40 PM
Rank: Veteran

Joined: 4/27/2010
Posts: 951
Location: Nyumbani
For those with the knowhow on bonds, how do you calculate what Britam is going to pay as interest ?

This is what they say

The Notes will mature on 15th July 2019 and carry a semiannual
fixed rate of interest of 13% p.a. (6.5% every six months)


Supposing you take for 100,000Ksh

I guess the interest will be 13000 at the end of the year (Am i right) and do you get the money (interest)before or in 2019 or its like the treasury bills? Will it be more profitable to buy the bonds for 100K or invest the 100k to buy more shares , Britam's or any other company's
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deadpoet
#2 Posted : Thursday, June 19, 2014 3:41:20 PM
Rank: Member

Joined: 9/27/2006
Posts: 506
My understanding is that you get paid the interest twice a year, as long as you hold onto the bond.

But it's an interesting question with existing bonds. A quick glance at the paper shows a 7-year HF bond at 13%. If I buy today, will I receive 6.5% at the end of the year? Not sure how the process works for already issued bonds...
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mwekez@ji
#3 Posted : Thursday, June 19, 2014 4:16:47 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
Indeed. In your illustration, person will get Kes.6,500/- (less Withholding Tax) in the following dates. Amount invested (Kes. 100,000/-) will be received back on Monday, 15th July 2019.

Monday, 19th January 2015
Monday, 20th July 2015
Monday, 18th January 2016
Monday, 18th July 2016
Monday, 16th January 2017
Monday, 17th July 2017
Monday, 15th January 2018
Monday, 16th July 2018
Monday, 14th January 2019
Monday, 15th July 2019

The bond definitely has lower risk and will thus have lower return than shares over the period
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Angelica _ann
#4 Posted : Thursday, June 19, 2014 4:25:02 PM
Rank: Elder

Joined: 12/7/2012
Posts: 11,936
Put the money is shares .... would have eaten dividends and capital gains. Just imagine you will get the same 100k in 2019.
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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kiash
#5 Posted : Thursday, June 19, 2014 7:55:10 PM
Rank: Veteran

Joined: 4/27/2010
Posts: 951
Location: Nyumbani
Thanks guys . Will make the best decision.
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maka
#6 Posted : Saturday, June 21, 2014 8:16:53 AM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
Angelica _ann wrote:
Put the money is shares .... would have eaten dividends and capital gains. Just imagine you will get the same 100k in 2019.

I would also go for stocks,the only good thing about fixed income securities is that you know the amount you will be getting as coupon thus you can plan ahead for the cash,downside returns arent that high esp if you factor in inflation and WHT...mostly good for HNIs...
possunt quia posse videntur
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mlennyma
#7 Posted : Saturday, June 21, 2014 11:04:18 AM
Rank: Elder

Joined: 7/21/2010
Posts: 6,194
Location: nairobi
My feeling is that bonds are suitable for wealthy tycoons who have money lying idle left,right and center.100k for 6500 in 6months is mockery,this is money you can make comfortably in less than a week.
"Don't let the fear of losing be greater than the excitement of winning."
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DtheK
#8 Posted : Saturday, June 21, 2014 12:06:54 PM
Rank: Member

Joined: 2/15/2010
Posts: 167
Location: Kenya
@kiash How much did u spend to make the 100k and how long did it take you? if you are confident you can make more than 13,000 from your 100k this year stick to what you do.
You don't have to chose between bonds and shares.You can do both unless the Britam bond is divided into 100k denominations.
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Impunity
#9 Posted : Saturday, June 21, 2014 3:53:24 PM
Rank: Elder

Joined: 3/2/2009
Posts: 26,331
Location: Masada
del
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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  | | Edit by user: Saturday, June 21, 2014 4:01 PM | Reason: Not specified
Impunity
#10 Posted : Saturday, June 21, 2014 4:01:18 PM
Rank: Elder

Joined: 3/2/2009
Posts: 26,331
Location: Masada
kiash wrote:
For those with the knowhow on bonds, how do you calculate what Britam is going to pay as interest ?

This is what they say

The Notes will mature on 15th July 2019 and carry a semiannual
fixed rate of interest of 13% p.a. (6.5% every six months)


Supposing you take for 100,000Ksh

I guess the interest will be 13000 at the end of the year (Am i right) and do you get the money (interest)before or in 2019 or its like the treasury bills? Will it be more profitable to buy the bonds for 100K or invest the 100k to buy more shares , Britam's or any other company's


Kumbe ulienda mayuu na hata haujasoma sana as we thought?

U still dont know the basics of bond trading with the apparent massive free internet access hapo DC...

Kwani kazi yako huko ni ya kuosha ornamental dolphins only?


Not talking Not talking Not talking Not talking
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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