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Treasury Bills and Bonds
oshario
#1 Posted : Tuesday, February 14, 2012 2:59:09 PM
Rank: Hello


Joined: 2/9/2012
Posts: 3
Location: Nairobi
What's the current situation with bills and bonds i.e. are they a good investment tool for now?
Impunity
#2 Posted : Saturday, February 25, 2012 1:53:11 PM
Rank: Elder


Joined: 3/2/2009
Posts: 24,918
Location: Masada
oshario wrote:
What's the current situation with bills and bonds i.e. are they a good investment tool for now?


Still very good returns,especially the T-bills at 19% returns and you get to enjoy the interest now!
Portfolio: KQ 6,200
You know you've made it when you get a parking space for your yatcht.

chiaroscuro
#3 Posted : Monday, February 27, 2012 10:30:19 AM
Rank: Veteran


Joined: 2/2/2012
Posts: 928
Location: Nairobi
oshario wrote:
What's the current situation with bills and bonds i.e. are they a good investment tool for now?


Always the better place to keep that 100k+ for 3 months+ instead of the falsely acclaimed fixed deposit in the banks.

BTW: Did you know that the banks will take your money from the fixed deposit and take it to T-Bills and then pay you half the interest rate? Why not go direct to CBK?
Chaka
#4 Posted : Tuesday, February 28, 2012 6:08:44 PM
Rank: Veteran


Joined: 2/16/2007
Posts: 1,691
Impunity wrote:


Still very good returns,especially the T-bills at 19% returns and you get to enjoy the interest now!


I thought the interest is paid at maturity i.e after 91 days for the 91 day T-Bill?
kyt
#5 Posted : Tuesday, February 28, 2012 6:22:42 PM
Rank: Elder


Joined: 11/7/2007
Posts: 2,178
you get the interest before hand, unakula interest kwanza halafu unangonja kulipwa pesa yako baadaye
LOVE WHAT YOU DO, DO WHAT YOU LOVE.
mukiha
#6 Posted : Wednesday, February 29, 2012 8:38:40 AM
Rank: Elder


Joined: 6/27/2008
Posts: 4,114
kyt wrote:
you get the interest before hand, unakula interest kwanza halafu unangonja kulipwa pesa yako baadaye


I also used to hold this misconception. But now I know better...

Suppose the interest rate is 19%; so you pay Sh96,119.20 [inc w-h-tax] and wait 91 days when you get sh100,000 back.

Does that really mean that you get the interest upfront? Of course not!
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
Impunity
#7 Posted : Monday, March 05, 2012 4:53:59 PM
Rank: Elder


Joined: 3/2/2009
Posts: 24,918
Location: Masada
mukiha wrote:
[quote=kyt]you get the interest before hand, unakula interest kwanza halafu unangonja kulipwa pesa yako baadaye


I also used to hold this misconception. But now I know better...

Suppose the interest rate is 19%; so you pay Sh96,119.20 [inc w-h-tax] and wait 91 days when you get sh100,000 back.

Does that really mean that you get the interest upfront? Of course not![/quote]

Ditto.
Pease expound coz the same school of thought can be applied to the normal bank deposits.
d'oh!
Portfolio: KQ 6,200
You know you've made it when you get a parking space for your yatcht.

Drunkard
#8 Posted : Thursday, March 08, 2012 11:34:06 PM
Rank: User


Joined: 5/3/2011
Posts: 559
@kyt
There is two part to bond/price/interest, the first part would be the zero coupon and that works like the way mukiha explained.

There is a coupon paying bonds, so I guess that is what your were trying to explain, the fact of the matter with coupon paying bonds is that as much as you're getting a constant coupon payment the value of your total bond investments is inversely proportional to market rates meaning that high market rates are not good!
nostoppingthis
#9 Posted : Thursday, April 12, 2012 4:09:23 PM
Rank: Chief


Joined: 8/24/2009
Posts: 5,909
Location: Nairobi
Asanteni, any more insights?
murchr
#10 Posted : Monday, November 11, 2013 11:34:35 PM
Rank: Elder


Joined: 2/26/2012
Posts: 10,609
What are the current rates?
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
Pesa Nane
#11 Posted : Tuesday, November 12, 2013 8:09:41 AM
Rank: Elder


Joined: 5/25/2012
Posts: 2,915
Location: 08c
murchr wrote:
What are the current rates?


As at 08 November 2013:

Benchmark
Value
Week Change


91-Day Treasury Bill
9.999%
▲ 1.500 bps

182-Day Treasury Bill
10.559%
▲ 5.700 bps

364-Day Treasury Bill
10.994%
▲ 4.100 bps

2 Year Treasury Bond
11.392%
0.000 bps

5 Year Treasury Bond
11.961%
▲ 28.120 bps

10 Year Treasury Bond
12.933%
▲ 8.270 bps

15 Year Treasury Bond
13.394%
0.000 bps

20 Year Treasury Bond
13.655%
0.000 bps

27 Year Treasury Bond
13.999%
0.000 bps

/D&B
Pesa Nane plans to be shilingi when he grows up.
Dahatre
#12 Posted : Tuesday, November 12, 2013 8:58:23 AM
Rank: Member


Joined: 12/21/2009
Posts: 334
Guys:

Please warn the absent minded among us when it's an old post! Almost ran to rob a bank to buy T-bills when I saw the 19% return rate from 2012...

Thanks pesa nane for the update.

Aguytrying
#13 Posted : Thursday, November 14, 2013 2:13:35 PM
Rank: Elder


Joined: 7/11/2010
Posts: 4,977
@tbill/ bond investors.
What would you advice.
1. To buy bonds/tbills directly from CBK
2. To join a money market fund traing in tbills/bonds.

also do stock brokers/investment banks help to trade in tbills/bonds? or is it better to go direct through CBK.

regards
The investor's chief problem - and even his worst enemy - is likely to be himself
mkonomtupu
#14 Posted : Thursday, November 14, 2013 2:33:42 PM
Rank: Veteran


Joined: 2/10/2010
Posts: 1,000
Location: River Road
Aguytrying wrote:
@tbill/ bond investors.
What would you advice.
1. To buy bonds/tbills directly from CBK
2. To join a money market fund traing in tbills/bonds.

also do stock brokers/investment banks help to trade in tbills/bonds? or is it better to go direct through CBK.

regards



for bonds you are better off in a bond fund. If you have an emergency it can be a nightmare selling those bonds when interest rates change. Stock brokers trade bonds and if they can't get a buyer they send you to CBK for redemption.

T-bills you can manage if you have the time to keep doing roll-over when the t-bill matures. Good for retirees but if you are busy it's easier to just buy a money market fund let them do the dirty work and credit your interest
murchr
#15 Posted : Thursday, November 14, 2013 3:44:20 PM
Rank: Elder


Joined: 2/26/2012
Posts: 10,609
Pesa Nane wrote:
murchr wrote:
What are the current rates?


As at 08 November 2013:

Benchmark
Value
Week Change


91-Day Treasury Bill
9.999%
▲ 1.500 bps

182-Day Treasury Bill
10.559%
▲ 5.700 bps

364-Day Treasury Bill
10.994%
▲ 4.100 bps

2 Year Treasury Bond
11.392%
0.000 bps

5 Year Treasury Bond
11.961%
▲ 28.120 bps

10 Year Treasury Bond
12.933%
▲ 8.270 bps

15 Year Treasury Bond
13.394%
0.000 bps

20 Year Treasury Bond
13.655%
0.000 bps

27 Year Treasury Bond
13.999%
0.000 bps

/D&B


Thanks @Pesa Nane...the interest is low.

Who would be in the know on how a wanjiku like me can participate in bonds eg the Kengen bond and other infrastructure bonds that are advertised? BONDS 101
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
Ngong
#16 Posted : Friday, November 15, 2013 10:09:44 AM
Rank: Veteran


Joined: 11/17/2012
Posts: 1,461
Location: Ngong Forest
9.999/12=0.83325 per month minus 15% Tax.
mukiha
#17 Posted : Friday, November 15, 2013 12:33:34 PM
Rank: Elder


Joined: 6/27/2008
Posts: 4,114
Aguytrying wrote:
@tbill/ bond investors.
What would you advice.
1. To buy bonds/tbills directly from CBK
2. To join a money market fund traing in tbills/bonds.

also do stock brokers/investment banks help to trade in tbills/bonds? or is it better to go direct through CBK.

regards


Note also that there are times when MMFs pay higher than the T-Bill average. Good to keep your eye on the rates regularly.

MMFs are currently ranging from 5.78 % [CBA] and 9.94% (Madison and Amana] - BUT not clear if these figures are net of wht.

Yesterday's T-Bill average was 9.979 = 8.85@ after wht.

Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
digitek1
#18 Posted : Friday, November 15, 2013 12:41:16 PM
Rank: Veteran


Joined: 2/3/2010
Posts: 1,797
Location: Kenya
mukiha wrote:
Aguytrying wrote:
@tbill/ bond investors.
What would you advice.
1. To buy bonds/tbills directly from CBK
2. To join a money market fund traing in tbills/bonds.

also do stock brokers/investment banks help to trade in tbills/bonds? or is it better to go direct through CBK.

regards


Note also that there are times when MMFs pay higher than the T-Bill average. Good to keep your eye on the rates regularly.

MMFs are currently ranging from 5.78 % [CBA] and 9.94% (Madison and Amana] - BUT not clear if these figures are net of wht.

Yesterday's T-Bill average was 9.979 = 8.85@ after wht.


so why not just invest in faulu?
I may be wrong..but then I could be right
Pesa Nane
#19 Posted : Friday, November 15, 2013 1:16:13 PM
Rank: Elder


Joined: 5/25/2012
Posts: 2,915
Location: 08c
murchr wrote:
Pesa Nane wrote:
murchr wrote:
What are the current rates?


As at 08 November 2013:

Benchmark
Value
Week Change


91-Day Treasury Bill
9.999%
▲ 1.500 bps

182-Day Treasury Bill
10.559%
▲ 5.700 bps

364-Day Treasury Bill
10.994%
▲ 4.100 bps

2 Year Treasury Bond
11.392%
0.000 bps

5 Year Treasury Bond
11.961%
▲ 28.120 bps

10 Year Treasury Bond
12.933%
▲ 8.270 bps

15 Year Treasury Bond
13.394%
0.000 bps

20 Year Treasury Bond
13.655%
0.000 bps

27 Year Treasury Bond
13.999%
0.000 bps

/D&B


Thanks @Pesa Nane...the interest is low.

Who would be in the know on how a wanjiku like me can participate in bonds eg the Kengen bond and other infrastructure bonds that are advertised? BONDS 101

Just walk into CBK (or your stock broker or banker) and demand for an account opening form. Fill, return to CBK and your virtual account is ready in 7 days.
Bond purchases can be done in person, or thro banks and stock brokers (most banks will charge you a commission even though they are paid a commission by the issuer).
Pesa Nane plans to be shilingi when he grows up.
maka
#20 Posted : Friday, November 15, 2013 1:21:34 PM
Rank: Elder


Joined: 4/22/2010
Posts: 9,555
Location: Nairobi
digitek1 wrote:
mukiha wrote:
Aguytrying wrote:
@tbill/ bond investors.
What would you advice.
1. To buy bonds/tbills directly from CBK
2. To join a money market fund traing in tbills/bonds.

also do stock brokers/investment banks help to trade in tbills/bonds? or is it better to go direct through CBK.

regards


Note also that there are times when MMFs pay higher than the T-Bill average. Good to keep your eye on the rates regularly.

MMFs are currently ranging from 5.78 % [CBA] and 9.94% (Madison and Amana] - BUT not clear if these figures are net of wht.

Yesterday's T-Bill average was 9.979 = 8.85@ after wht.


so why not just invest in faulu?


Default risk...
possunt quia posse videntur
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