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BRITAM Bond
Rank: Veteran Joined: 4/27/2010 Posts: 951 Location: Nyumbani
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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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Rank: Member Joined: 9/27/2006 Posts: 496
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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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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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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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Rank: Elder Joined: 12/7/2012 Posts: 11,901
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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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Rank: Veteran Joined: 4/27/2010 Posts: 951 Location: Nyumbani
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Thanks guys . Will make the best decision.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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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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Rank: Elder Joined: 7/21/2010 Posts: 6,175 Location: nairobi
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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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Rank: Member Joined: 2/15/2010 Posts: 117 Location: Kenya
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@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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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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del 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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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?  Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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mlennyma wrote: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. I concur. stocks is the way to go unless we are talking about very BIG money. in that case you're limited to the big caps like mpesa,member n simba n even then it can't work out well coz you're the market mover.
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Rank: Member Joined: 7/4/2010 Posts: 118
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Its funny how i always get such insight from Wazua.... thanks guys.
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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http://www.constructionk...ower-upper-hill-nairobi/Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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The cost has been revised upwards and this is what necessitated the bond Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 4/27/2010 Posts: 951 Location: Nyumbani
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Impunity wrote: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? Funny that's the only thing you pick. Who told you kusoma is when you know how to deal in bonds? yeah there is lots of information on the net but seeking a second opinion is actually wisdom. I do not have a PHD but am happy with what i have 
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Rank: Member Joined: 1/2/2008 Posts: 268 Location: Nairobi
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mlennyma wrote: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. Share
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Rank: Member Joined: 5/8/2007 Posts: 709
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Someone advise me, if i invest approx 950k in the britam bond.How much returns should i expects in 6 months or 1 year?
Thanks
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Rank: Member Joined: 10/19/2009 Posts: 671 Location: Nairobi
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lisaox wrote:Its funny how i always get such insight from Wazua.... thanks guys. How funny???
Life is joy, death is peace, but the transition is very difficult.
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Rank: Member Joined: 1/13/2014 Posts: 378 Location: Denmark
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faa wrote:Someone advise me, if i invest approx 950k in the britam bond.How much returns should i expects in 6 months or 1 year?
Thanks Before we answer your question I hope you aware the bond offer already closed.. right? Interest rate 13% p.a. but its a five year bond. In one year you get 104,975 interest(net of WHT). Seeing is believing
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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Britam bond has been oversubscribed by 147%.Amount received is ksh.7.4 billion against a target of ksh.3b. The company will execute the green shoe option and take up ksh.6 Billion hence there will be no other tranche. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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