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M-Akiba treasury bonds via mobile
KulaRaha
#21 Posted : Tuesday, September 29, 2015 7:56:33 AM
Rank: Elder


Joined: 7/26/2007
Posts: 6,514
Desperation for money since CBK is so far behind budget on their borrowing. Wonder what the money will be wasted on?
Business opportunities are like buses,there's always another one coming
Impunity
#22 Posted : Tuesday, September 29, 2015 9:10:45 AM
Rank: Elder


Joined: 3/2/2009
Posts: 26,328
Location: Masada
alutacontinua wrote:
CBK this month offered a 1 year treasury bond for Ksh. 30B with the average redemption yield of 19.062%. Uptake of this bond was 88.35% (Ksh. 26.505B)

https://www.centralbank....2028.09.2015updated.pdf

Thinking they will offer a slightly higher yield to attract flows.

Its interesting to note that the next bond auction at CBK will be on 26th October days after the M-Akiba launch.


Is this 5B 26th October bond exclusively for Mpesa peasnts only or I can still access it through my normal way?
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.

kayhara
#23 Posted : Tuesday, September 29, 2015 9:31:55 AM
Rank: Veteran


Joined: 5/5/2011
Posts: 1,059
Going by the rate ordinary guys are locking funds in mshwari, then if they learn that they can lock the little money they have in T.B from serikali then CBK will have succeeded, plus if they market them on the many fm stations = success
To Each His Own
bird_man
#24 Posted : Tuesday, September 29, 2015 9:35:27 AM
Rank: Veteran


Joined: 11/2/2006
Posts: 1,206
Location: Nairobi
kayhara wrote:
Going by the rate ordinary guys are locking funds in mshwari, then if they learn that they can lock the little money they have in T.B from serikali then CBK will have succeeded, plus if they market them on the many fm stations = success

The kawaida Wanjiku will want to cash out in 1 or 2 months even when intention was to stay for long.What then?Secondary market at unfavourable rates?
Formally employed people often live their employers' dream & forget about their own.
maka
#25 Posted : Tuesday, September 29, 2015 9:43:06 AM
Rank: Elder


Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
bird_man wrote:
kayhara wrote:
Going by the rate ordinary guys are locking funds in mshwari, then if they learn that they can lock the little money they have in T.B from serikali then CBK will have succeeded, plus if they market them on the many fm stations = success

The kawaida Wanjiku will want to cash out in 1 or 2 months even when intention was to stay for long.What then?Secondary market at unfavourable rates?


Rediscounting...
possunt quia posse videntur
alutacontinua
#26 Posted : Tuesday, September 29, 2015 10:04:09 AM
Rank: Member


Joined: 3/23/2011
Posts: 304
Impunity wrote:
alutacontinua wrote:
CBK this month offered a 1 year treasury bond for Ksh. 30B with the average redemption yield of 19.062%. Uptake of this bond was 88.35% (Ksh. 26.505B)

https://www.centralbank....2028.09.2015updated.pdf

Thinking they will offer a slightly higher yield to attract flows.

Its interesting to note that the next bond auction at CBK will be on 26th October days after the M-Akiba launch.


Is this 5B 26th October bond exclusively for Mpesa peasnts only or I can still access it through my normal way?


@impunity it sounds like this particular infrastructure bond is exclusive to mobile money.

@mlennyma the interest rate for the bond will be released by CBK on 16th of October i believe. (BD indicating it will be close to 13.2%) I expect there to be a flood of adverts in the media.

Going forward it will be interesting to see what other purchase options M-Akiba will have.
You dont have to be great to START but you have to start to be GREAT!!!!!!!!
Impunity
#27 Posted : Tuesday, September 29, 2015 10:14:01 AM
Rank: Elder


Joined: 3/2/2009
Posts: 26,328
Location: Masada
alutacontinua wrote:
Impunity wrote:
alutacontinua wrote:
CBK this month offered a 1 year treasury bond for Ksh. 30B with the average redemption yield of 19.062%. Uptake of this bond was 88.35% (Ksh. 26.505B)

https://www.centralbank....2028.09.2015updated.pdf

Thinking they will offer a slightly higher yield to attract flows.

Its interesting to note that the next bond auction at CBK will be on 26th October days after the M-Akiba launch.


Is this 5B 26th October bond exclusively for Mpesa peasnts only or I can still access it through my normal way?


@impunity it sounds like this particular infrastructure bond is exclusive to mobile money.

@mlennyma the interest rate for the bond will be released by CBK on 16th of October i believe. (BD indicating it will be close to 13.2%) I expect there to be a flood of adverts in the media.

Going forward it will be interesting to see what other purchase options M-Akiba will have.


13.2% is meager considering that 91 Day T-Bill is expected to rally at 20% by mid October to year end.
Wacha Wanjiku wachinjwe.
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.

watesh
#28 Posted : Tuesday, September 29, 2015 10:19:47 AM
Rank: Veteran


Joined: 8/10/2014
Posts: 969
Location: Kenya
hisah wrote:
Tbond IPO... How many wanjikus are informed on tbonds/tbills? This is what will determine if this 'tbond IPO' is a success. This will be an interesting case study.

How much is mpesa bank going to earn apart from mpesa fees? Any transaction fees like banks when they place bond bids on your behalf? When this market gets popular those fees will be a serious cash cow!! At some point mpesa bank will be split from the telco part to aid in better supervision.

With those transaction charges of investing and extra charges when it comes to withdrawing cash at maturity, MEGA CASH COW. A whole extra 5 billion moving through platform away from the normal transactions. (Safaricom never offers services for free when it comes to mpesa ...never!!)
mlennyma
#29 Posted : Tuesday, September 29, 2015 10:25:31 AM
Rank: Elder


Joined: 7/21/2010
Posts: 6,183
Location: nairobi
I heard the Cs saying they will offer a higher interest than what banks are offering then I concluded they want to take advantage of wanjikus who don't know other better rates in money markets.
"Don't let the fear of losing be greater than the excitement of winning."
bird_man
#30 Posted : Tuesday, September 29, 2015 11:02:18 AM
Rank: Veteran


Joined: 11/2/2006
Posts: 1,206
Location: Nairobi
mlennyma wrote:
I heard the Cs saying they will offer a higher interest than what banks are offering then I concluded they want to take advantage of wanjikus who don't know other better rates in money markets.


But surely why start with a 5Yr Bond? I hope that is clear to Wanjikus.
Formally employed people often live their employers' dream & forget about their own.
Impunity
#31 Posted : Tuesday, September 29, 2015 11:13:49 AM
Rank: Elder


Joined: 3/2/2009
Posts: 26,328
Location: Masada
bird_man wrote:
mlennyma wrote:
I heard the Cs saying they will offer a higher interest than what banks are offering then I concluded they want to take advantage of wanjikus who don't know other better rates in money markets.


But surely why start with a 5Yr Bond? I hope that is clear to Wanjikus.


Wanjikus hawana know.
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.

Aguytrying
#32 Posted : Tuesday, September 29, 2015 11:18:48 AM
Rank: Elder


Joined: 7/11/2010
Posts: 5,040
bird_man wrote:
mlennyma wrote:
I heard the Cs saying they will offer a higher interest than what banks are offering then I concluded they want to take advantage of wanjikus who don't know other better rates in money markets.


But surely why start with a 5Yr Bond? I hope that is clear to Wanjikus.


I also feel that this M-Akiba would be more suited to treasury bills more that long term bonds
The investor's chief problem - and even his worst enemy - is likely to be himself
mlennyma
#33 Posted : Tuesday, September 29, 2015 11:24:21 AM
Rank: Elder


Joined: 7/21/2010
Posts: 6,183
Location: nairobi
Aguytrying wrote:
bird_man wrote:
mlennyma wrote:
I heard the Cs saying they will offer a higher interest than what banks are offering then I concluded they want to take advantage of wanjikus who don't know other better rates in money markets.


But surely why start with a 5Yr Bond? I hope that is clear to Wanjikus.


I also feel that this M-Akiba would be more suited to treasury bills more that long term bonds

very few wanjikus have money to keep somewhere for more than 6months without touching it.3months treasury bills can work quite well on this m-akiba thing,infact it can succeed 100%
"Don't let the fear of losing be greater than the excitement of winning."
Muthawamunene
#34 Posted : Tuesday, September 29, 2015 12:40:49 PM
Rank: Member


Joined: 1/3/2011
Posts: 264
Location: Nairobi
maka wrote:
bird_man wrote:
kayhara wrote:
Going by the rate ordinary guys are locking funds in mshwari, then if they learn that they can lock the little money they have in T.B from serikali then CBK will have succeeded, plus if they market them on the many fm stations = success

The kawaida Wanjiku will want to cash out in 1 or 2 months even when intention was to stay for long.What then?Secondary market at unfavourable rates?


Rediscounting...


Was just about to ask the same thing.

We know you can buy by dialing *8-whatever_#, but how will you dispose of it? Is it liquidly tradable?
How will Wanjiku determine if she's getting a fair deal upon selling?

But I think the NSE will have provisions for these questions. Something like a leader board showing bids and asks. In that case let 'er rip.

6 months ain't too long wanjiku to wait for an interest payout. Its good.

Might even pop this property froth in the long term by giving peeps an alternative investment channel.



Equities will take a hit though, as wanjiku exits her positions.
maka
#35 Posted : Tuesday, September 29, 2015 12:54:57 PM
Rank: Elder


Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
Muthawamunene wrote:
maka wrote:
bird_man wrote:
kayhara wrote:
Going by the rate ordinary guys are locking funds in mshwari, then if they learn that they can lock the little money they have in T.B from serikali then CBK will have succeeded, plus if they market them on the many fm stations = success

The kawaida Wanjiku will want to cash out in 1 or 2 months even when intention was to stay for long.What then?Secondary market at unfavourable rates?


Rediscounting...


Was just about to ask the same thing.

We know you can buy by dialing *8-whatever_#, but how will you dispose of it? Is it liquidly tradable?
How will Wanjiku determine if she's getting a fair deal upon selling?

But I think the NSE will have provisions for these questions. Something like a leader board showing bids and asks. In that case let 'er rip.

6 months ain't too long wanjiku to wait for an interest payout. Its good.

Might even pop this property froth in the long term by giving peeps an alternative investment channel.



Equities will take a hit though, as wanjiku exits her positions.


Fixed Income Brokers have been fighting such a system for a long time coz if the board comes into place their work ends...Bond trading is more about negotiating wonder how this will work,how many Wanjikus realise that a drop in bps equates to a profit?
possunt quia posse videntur
vastcapital
#36 Posted : Tuesday, September 29, 2015 1:14:43 PM
Rank: New-farer


Joined: 10/10/2010
Posts: 51
Location: Nairobi
You are missing the point guys. Bonds are high value investments. Traditionally invested in massively by HNI who have at most an objective to grow their monies just above inflation, here we talking of fund managers, investment bankers with lots of liquidity and highly liquid corporates etc. Bonds and Bills are designed for them...But to now bring in Wanjiku with her 3K...is a statement that GOK is too broke it needs any extra coin it can get.
sitaki.kujulikana
#37 Posted : Tuesday, September 29, 2015 2:24:36 PM
Rank: Veteran


Joined: 8/25/2012
Posts: 1,826
anyone kind enough to explain to me wanjiku how this works.
will be highly appreciated
muganda
#38 Posted : Tuesday, September 29, 2015 3:26:40 PM
Rank: Elder


Joined: 9/15/2006
Posts: 3,905
Seems pretty straightforward to me https://www.facebook.com/Safaric...0156124926960084/?type=3; a lot to become clearer closer to the time, but it all starts with dialing those digits.
sitaki.kujulikana wrote:
anyone kind enough to explain to me wanjiku how this works.
will be highly appreciated


Picked on a conversation that shows Ethiopia were the first to do this 'Wanjiku' tbill raising KShs 36.5bn from 129 bob subscriptions! (not via mobile though).


selah
#39 Posted : Tuesday, September 29, 2015 3:36:43 PM
Rank: Elder


Joined: 10/13/2009
Posts: 1,950
Location: in kenya
The question is does treasury has the power to borrow locally independent of CBK?

CBK has no role in this new product,I think treasury is overstepping its mandate....Why is it bypassing CBK on this.

How can we be sure that this Bond will not be used like the sovereign bond which has more shadowy dealings than was revealed when it was being floated.
'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
Scubidu
#40 Posted : Tuesday, September 29, 2015 4:42:00 PM
Rank: Veteran


Joined: 9/4/2009
Posts: 700
Location: Nairobi
This seems like a good initiative to build savings and it'll likely do very well initially. I think the way Kenyans invest this days however is more opportunistic (than long term) because they always need an exit and tend to relate to property (physical assets) better. But this will likely work because people like investing in new things.

It might have been more prudent to test the market with sh500 mio instead of Sh5bio given the anticipated admin work required to manage a Sh3,000 investor for example. If the bond is a successful then it can be tapped indefinitely until Treasury are satisfied with the proceeds. But then bond can't be liquid because the yield rate determined by Treasury (i.e., lack of an public auction kills pricing power) and ordinary stockbrokers seem clueless as to their role in this (if any).

Right now it seems Safcom and CDSC will be solely responsible for implementing the usual KYC process and anti-money laundering initiatives started by CBK. It's unclear what value CDSC adds as this project should have remained with CBK to harmonize the bond registry for coupon payments. In this case both CDSC and CBK will have to keep accurate records for the thousands of investors, which begs the question of whether CBK can now outsource it's custodian function (for all government securities) to a private sector entity.

The only way to liquidate this bond will be through rediscounting, which is done at 3% above market yields currently (wanjiku will be shocked by this initially). Rediscounting means that CBK and CDSC will have to coordinate perfectly with record sharing, which is very inefficient.

Perhaps more immediate reforms Treasury can institute is remove withholding tax for foreign investors on Treasury bills (to attract USD to Kenya), rework the repo market mechanisms for institutional banks (to provide money market liquidity) and revert to mobile phones completely for all government securities below Sh100,000 (to make them more accessible to wananchi).

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