Wazua
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Treasury Bills and Bonds
Rank: Veteran Joined: 4/4/2016 Posts: 1,997 Location: Kitale
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maka wrote:Dear All, I attended a Bond Market Stakeholders Meeting at the Central Bank chaired by the Deputy Governor yesterday afternoon. Key highlights were as follows: Monthly Update · Oversubscriptions for Treasury Bill issues was noted · Treasury Bill rates increased in August · There has been a decline in interest rates post-assent of the Banking (Amendment) Act by the President on 24th August 2016 · During the last Treasury Bond Auction, CBK accepted Kshs 18.3 bn out of Kshs 26.3 bn received (Kshs 25 bn was offered) due to aggressive bidding · There was improvement (4.7%) in secondary bond market turnover in August (Kshs 18.64 bn vs 17.8 bn in July) · Yield curve shifted upwards at the short end · Outstanding debt is Kshs 1,771.23 bn in the following proportions: T-Bills (33.8%): T-Bonds (66.2%). The desired threshold is 30:70 (TBills/TBonds) · Average maturity of Government Securities is 4.3 years and 7 years for Bonds only · Cumulative borrowing for the fiscal year is Kshs 31.33 bn against annual cumulative target of Kshs 225.3 bn, so the new borrowing requirement is Kshs 193.97 bn · The DG emphasized that CBK remains focused on ensuring predictability, stability and progress in the bond market and requested the input of participants regarding an indicative (theoretical) yield curve and share with the CBK team before the next meeting Bond Proposal · The draft quarterly debt issuance calendar has been withdrawn (please see my meeting notes dated 3rd August, which cited lack of consultation prior to circulation) · The bond proposal for September is as follows: o 5-year & 20-year bond o Issue date: 20th September 2016 o Settlement date: 26th September o Offer amount: Kshs 25 bn (Green Shoe Option of Kshs 10 bn) o Coupon: CBK to determine Market Developments · There are currently 2 working committees on Capital Markets and Government Debt Management working on the following issues: 1. M-AKIBA 2. Treasury Mobile Direct (TMD) 3. Internet Banking 4. Debt Issuance Calendar 5. OTC Market 6. Short-selling (NB: not for currencies, in view of recent experiences with Nigeria, South Africa and Zambia) · Target timelines for implementation of these initiatives is June 2017, after which Primary Dealership will be addressed · The status of the Treasury Single account will be addressed at the next meeting, during which the Director of Banking at CBK will be in attendance to shed more light. AOB · With regard to the operationalization of the Banking (Amendment)Act 2015, the DG stated that it was not the responsibility of the CBK to operationalize the law so nobody should expect the CBK to issue the guidelines. @maka,that was a good brief.Im planning to invest in the T. bond on January 2017.Would you pliz shed some lights on these points: 1.Witholding tax. How much does cbk charge? 2.If i take a bond of 15 years,after two years can i change my minds and have my money back? 3.If i subscribe a bond of 200000 and after one year i want to add another 100000 is that possible? Towards the goal of financial freedom
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Ebenyo wrote:maka wrote:Dear All, I attended a Bond Market Stakeholders Meeting at the Central Bank chaired by the Deputy Governor yesterday afternoon. Key highlights were as follows: Monthly Update · Oversubscriptions for Treasury Bill issues was noted · Treasury Bill rates increased in August · There has been a decline in interest rates post-assent of the Banking (Amendment) Act by the President on 24th August 2016 · During the last Treasury Bond Auction, CBK accepted Kshs 18.3 bn out of Kshs 26.3 bn received (Kshs 25 bn was offered) due to aggressive bidding · There was improvement (4.7%) in secondary bond market turnover in August (Kshs 18.64 bn vs 17.8 bn in July) · Yield curve shifted upwards at the short end · Outstanding debt is Kshs 1,771.23 bn in the following proportions: T-Bills (33.8%): T-Bonds (66.2%). The desired threshold is 30:70 (TBills/TBonds) · Average maturity of Government Securities is 4.3 years and 7 years for Bonds only · Cumulative borrowing for the fiscal year is Kshs 31.33 bn against annual cumulative target of Kshs 225.3 bn, so the new borrowing requirement is Kshs 193.97 bn · The DG emphasized that CBK remains focused on ensuring predictability, stability and progress in the bond market and requested the input of participants regarding an indicative (theoretical) yield curve and share with the CBK team before the next meeting Bond Proposal · The draft quarterly debt issuance calendar has been withdrawn (please see my meeting notes dated 3rd August, which cited lack of consultation prior to circulation) · The bond proposal for September is as follows: o 5-year & 20-year bond o Issue date: 20th September 2016 o Settlement date: 26th September o Offer amount: Kshs 25 bn (Green Shoe Option of Kshs 10 bn) o Coupon: CBK to determine Market Developments · There are currently 2 working committees on Capital Markets and Government Debt Management working on the following issues: 1. M-AKIBA 2. Treasury Mobile Direct (TMD) 3. Internet Banking 4. Debt Issuance Calendar 5. OTC Market 6. Short-selling (NB: not for currencies, in view of recent experiences with Nigeria, South Africa and Zambia) · Target timelines for implementation of these initiatives is June 2017, after which Primary Dealership will be addressed · The status of the Treasury Single account will be addressed at the next meeting, during which the Director of Banking at CBK will be in attendance to shed more light. AOB · With regard to the operationalization of the Banking (Amendment)Act 2015, the DG stated that it was not the responsibility of the CBK to operationalize the law so nobody should expect the CBK to issue the guidelines. @maka,that was a good brief.Im planning to invest in the T. bond on January 2017.Would you pliz shed some lights on these points: 1.Witholding tax. How much does cbk charge? 2.If i take a bond of 15 years,after two years can i change my minds and have my money back? Tenors above 10 years WHT is 10% below its 15%.. You can get your money back by selling via the secondary market.You can sell anytime after the value date post auction. possunt quia posse videntur
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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This is where liquidity will flow. Why lend? Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 12/7/2012 Posts: 11,908
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KulaRaha wrote:This is where liquidity will flow. Why lend? Still a ripple effect and a defeatists strategy. At end of the day, banks MUST lend otherwise they will cease to exist 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: Elder Joined: 12/4/2009 Posts: 10,684 Location: NAIROBI
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http://www.businessdaily...373004-muar09/index.htmlWealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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maka wrote:Dear All, I attended a Bond Market Stakeholders Meeting at the Central Bank chaired by the Deputy Governor yesterday afternoon. Key highlights were as follows: Monthly Update · Oversubscriptions for Treasury Bill issues was noted · Treasury Bill rates increased in August · There has been a decline in interest rates post-assent of the Banking (Amendment) Act by the President on 24th August 2016 · During the last Treasury Bond Auction, CBK accepted Kshs 18.3 bn out of Kshs 26.3 bn received (Kshs 25 bn was offered) due to aggressive bidding · There was improvement (4.7%) in secondary bond market turnover in August (Kshs 18.64 bn vs 17.8 bn in July) · Yield curve shifted upwards at the short end · Outstanding debt is Kshs 1,771.23 bn in the following proportions: T-Bills (33.8%): T-Bonds (66.2%). The desired threshold is 30:70 (TBills/TBonds) · Average maturity of Government Securities is 4.3 years and 7 years for Bonds only · Cumulative borrowing for the fiscal year is Kshs 31.33 bn against annual cumulative target of Kshs 225.3 bn, so the new borrowing requirement is Kshs 193.97 bn · The DG emphasized that CBK remains focused on ensuring predictability, stability and progress in the bond market and requested the input of participants regarding an indicative (theoretical) yield curve and share with the CBK team before the next meeting Bond Proposal · The draft quarterly debt issuance calendar has been withdrawn (please see my meeting notes dated 3rd August, which cited lack of consultation prior to circulation) · The bond proposal for September is as follows: o 5-year & 20-year bond o Issue date: 20th September 2016 o Settlement date: 26th September o Offer amount: Kshs 25 bn (Green Shoe Option of Kshs 10 bn) o Coupon: CBK to determine Market Developments · There are currently 2 working committees on Capital Markets and Government Debt Management working on the following issues: 1. M-AKIBA 2. Treasury Mobile Direct (TMD) 3. Internet Banking 4. Debt Issuance Calendar 5. OTC Market 6. Short-selling (NB: not for currencies, in view of recent experiences with Nigeria, South Africa and Zambia) · Target timelines for implementation of these initiatives is June 2017, after which Primary Dealership will be addressed · The status of the Treasury Single account will be addressed at the next meeting, during which the Director of Banking at CBK will be in attendance to shed more light. AOB · With regard to the operationalization of the Banking (Amendment)Act 2015, the DG stated that it was not the responsibility of the CBK to operationalize the law so nobody should expect the CBK to issue the guidelines. Did they mention if we gonna have any Infrastructure Bond in the near future? Say before the end of this year? Thnaks. 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: 26,328 Location: Masada
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Angelica _ann wrote:Erokamano @maka, i want to join the bond bandwagon after learning. Patiently waiting for M-Akiba. M-Akiba is not worth your struggle. Thats left to milk @wanjiku. For a sensible serious Bonds you got to do matters in the range of Kes. 1,000,000! Otherwise use your Kes.5,000 cash to trade in njugu karanja. 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: 26,328 Location: Masada
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maka wrote:Ebenyo wrote:maka wrote:Dear All, I attended a Bond Market Stakeholders Meeting at the Central Bank chaired by the Deputy Governor yesterday afternoon. Key highlights were as follows: Monthly Update · Oversubscriptions for Treasury Bill issues was noted · Treasury Bill rates increased in August · There has been a decline in interest rates post-assent of the Banking (Amendment) Act by the President on 24th August 2016 · During the last Treasury Bond Auction, CBK accepted Kshs 18.3 bn out of Kshs 26.3 bn received (Kshs 25 bn was offered) due to aggressive bidding · There was improvement (4.7%) in secondary bond market turnover in August (Kshs 18.64 bn vs 17.8 bn in July) · Yield curve shifted upwards at the short end · Outstanding debt is Kshs 1,771.23 bn in the following proportions: T-Bills (33.8%): T-Bonds (66.2%). The desired threshold is 30:70 (TBills/TBonds) · Average maturity of Government Securities is 4.3 years and 7 years for Bonds only · Cumulative borrowing for the fiscal year is Kshs 31.33 bn against annual cumulative target of Kshs 225.3 bn, so the new borrowing requirement is Kshs 193.97 bn · The DG emphasized that CBK remains focused on ensuring predictability, stability and progress in the bond market and requested the input of participants regarding an indicative (theoretical) yield curve and share with the CBK team before the next meeting Bond Proposal · The draft quarterly debt issuance calendar has been withdrawn (please see my meeting notes dated 3rd August, which cited lack of consultation prior to circulation) · The bond proposal for September is as follows: o 5-year & 20-year bond o Issue date: 20th September 2016 o Settlement date: 26th September o Offer amount: Kshs 25 bn (Green Shoe Option of Kshs 10 bn) o Coupon: CBK to determine Market Developments · There are currently 2 working committees on Capital Markets and Government Debt Management working on the following issues: 1. M-AKIBA 2. Treasury Mobile Direct (TMD) 3. Internet Banking 4. Debt Issuance Calendar 5. OTC Market 6. Short-selling (NB: not for currencies, in view of recent experiences with Nigeria, South Africa and Zambia) · Target timelines for implementation of these initiatives is June 2017, after which Primary Dealership will be addressed · The status of the Treasury Single account will be addressed at the next meeting, during which the Director of Banking at CBK will be in attendance to shed more light. AOB · With regard to the operationalization of the Banking (Amendment)Act 2015, the DG stated that it was not the responsibility of the CBK to operationalize the law so nobody should expect the CBK to issue the guidelines. @maka,that was a good brief.Im planning to invest in the T. bond on January 2017.Would you pliz shed some lights on these points: 1.Witholding tax. How much does cbk charge? 2.If i take a bond of 15 years,after two years can i change my minds and have my money back? Tenors above 10 years WHT is 10% below its 15%.. You can get your money back by selling via the secondary market.You can sell anytime after the value date post auction. You should have added that its not easy to sell a Bond without an haircut! Remind him he will to sell his Bond at the prevailing rates, not necessary the rate he bought it! So he may not get his money back in its entirity. Portfolio: Sold You know you've made it when you get a parking space for your yatcht.
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Rank: Veteran Joined: 4/4/2016 Posts: 1,997 Location: Kitale
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@ Maka,another question. If i start with t.bond of 50 k and i want to be adding 50k every now and then,what im supposed to do? Towards the goal of financial freedom
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Ebenyo wrote:@ Maka,another question. If i start with t.bond of 50 k and i want to be adding 50k every now and then,what im supposed to do? Morning...you just reapply during every auction depending on the T bill you want...forms are available online at cbk site make sure you drop them at the correct tender box hapo CBK possunt quia posse videntur
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Impunity wrote:maka wrote:Ebenyo wrote:maka wrote:Dear All, I attended a Bond Market Stakeholders Meeting at the Central Bank chaired by the Deputy Governor yesterday afternoon. Key highlights were as follows: Monthly Update · Oversubscriptions for Treasury Bill issues was noted · Treasury Bill rates increased in August · There has been a decline in interest rates post-assent of the Banking (Amendment) Act by the President on 24th August 2016 · During the last Treasury Bond Auction, CBK accepted Kshs 18.3 bn out of Kshs 26.3 bn received (Kshs 25 bn was offered) due to aggressive bidding · There was improvement (4.7%) in secondary bond market turnover in August (Kshs 18.64 bn vs 17.8 bn in July) · Yield curve shifted upwards at the short end · Outstanding debt is Kshs 1,771.23 bn in the following proportions: T-Bills (33.8%): T-Bonds (66.2%). The desired threshold is 30:70 (TBills/TBonds) · Average maturity of Government Securities is 4.3 years and 7 years for Bonds only · Cumulative borrowing for the fiscal year is Kshs 31.33 bn against annual cumulative target of Kshs 225.3 bn, so the new borrowing requirement is Kshs 193.97 bn · The DG emphasized that CBK remains focused on ensuring predictability, stability and progress in the bond market and requested the input of participants regarding an indicative (theoretical) yield curve and share with the CBK team before the next meeting Bond Proposal · The draft quarterly debt issuance calendar has been withdrawn (please see my meeting notes dated 3rd August, which cited lack of consultation prior to circulation) · The bond proposal for September is as follows: o 5-year & 20-year bond o Issue date: 20th September 2016 o Settlement date: 26th September o Offer amount: Kshs 25 bn (Green Shoe Option of Kshs 10 bn) o Coupon: CBK to determine Market Developments · There are currently 2 working committees on Capital Markets and Government Debt Management working on the following issues: 1. M-AKIBA 2. Treasury Mobile Direct (TMD) 3. Internet Banking 4. Debt Issuance Calendar 5. OTC Market 6. Short-selling (NB: not for currencies, in view of recent experiences with Nigeria, South Africa and Zambia) · Target timelines for implementation of these initiatives is June 2017, after which Primary Dealership will be addressed · The status of the Treasury Single account will be addressed at the next meeting, during which the Director of Banking at CBK will be in attendance to shed more light. AOB · With regard to the operationalization of the Banking (Amendment)Act 2015, the DG stated that it was not the responsibility of the CBK to operationalize the law so nobody should expect the CBK to issue the guidelines. @maka,that was a good brief.Im planning to invest in the T. bond on January 2017.Would you pliz shed some lights on these points: 1.Witholding tax. How much does cbk charge? 2.If i take a bond of 15 years,after two years can i change my minds and have my money back? Tenors above 10 years WHT is 10% below its 15%.. You can get your money back by selling via the secondary market.You can sell anytime after the value date post auction. You should have added that its not easy to sell a Bond without an haircut! Remind him he will to sell his Bond at the prevailing rates, not necessary the rate he bought it! So he may not get his money back in its entirity. Thats why it is important to know where the market is...looking at the price list kwa business daily will help....problem with small bonds Fixed income dealers squueze customers properly so that they make a spread for their own profit. possunt quia posse videntur
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Rank: Veteran Joined: 4/4/2016 Posts: 1,997 Location: Kitale
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maka wrote:Ebenyo wrote:@ Maka,another question. If i start with t.bond of 50 k and i want to be adding 50k every now and then,what im supposed to do? Morning...you just reapply during every auction depending on the T bill you want...forms are available online at cbk site make sure you drop them at the correct tender box hapo CBK i mean t.bond not t.bill. Towards the goal of financial freedom
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Rank: Member Joined: 1/3/2014 Posts: 257
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Ericsson wrote:http://www.businessdailyafrica.com/Mobile-traded-M-Akiba-bond-set-to-be-launched-in-a-month/539552-3373004-muar09/index.html The CBK website also got a facelift. Must be in preparation for the expected increase in visitors to the site. The new site still some kinks to be ironed but but so far so good.
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Rank: Member Joined: 1/3/2014 Posts: 257
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Ebenyo wrote:maka wrote:Ebenyo wrote:@ Maka,another question. If i start with t.bond of 50 k and i want to be adding 50k every now and then,what im supposed to do? Morning...you just reapply during every auction depending on the T bill you want...forms are available online at cbk site make sure you drop them at the correct tender box hapo CBK i mean t.bond not t.bill. You have two options. Apply for subsequent bond offers at CBK, primary market. For example you buy a 5 year bond in a certain month then several months later buy a 10 year bond on offer then (or whichever other is on offer). Buy an existing bond in secondary market. For example buy a 5 year bond in a certain month then several months later return to secondary market to buy the same 5 year bond (or any other that is made available for purchase).
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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snipermnoma wrote:Ebenyo wrote:maka wrote:Ebenyo wrote:@ Maka,another question. If i start with t.bond of 50 k and i want to be adding 50k every now and then,what im supposed to do? Morning...you just reapply during every auction depending on the T bill you want...forms are available online at cbk site make sure you drop them at the correct tender box hapo CBK i mean t.bond not t.bill. You have two options. Apply for subsequent bond offers at CBK, primary market. For example you buy a 5 year bond in a certain month then several months later buy a 10 year bond on offer then (or whichever other is on offer). Buy an existing bond in secondary market. For example buy a 5 year bond in a certain month then several months later return to secondary market to buy the same 5 year bond (or any other that is made available for purchase). What are the chances of getting the Infrastructure Bond in the secondary market? Do u know the of the next release of IFB? Portfolio: Sold You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Impunity wrote:snipermnoma wrote:Ebenyo wrote:maka wrote:Ebenyo wrote:@ Maka,another question. If i start with t.bond of 50 k and i want to be adding 50k every now and then,what im supposed to do? Morning...you just reapply during every auction depending on the T bill you want...forms are available online at cbk site make sure you drop them at the correct tender box hapo CBK i mean t.bond not t.bill. You have two options. Apply for subsequent bond offers at CBK, primary market. For example you buy a 5 year bond in a certain month then several months later buy a 10 year bond on offer then (or whichever other is on offer). Buy an existing bond in secondary market. For example buy a 5 year bond in a certain month then several months later return to secondary market to buy the same 5 year bond (or any other that is made available for purchase). What are the chances of getting the Infrastructure Bond in the secondary market? Do u know the of the next release of IFB? You have my email...il get you the IFBs... possunt quia posse videntur
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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maka wrote:Impunity wrote:snipermnoma wrote:Ebenyo wrote:maka wrote:Ebenyo wrote:@ Maka,another question. If i start with t.bond of 50 k and i want to be adding 50k every now and then,what im supposed to do? Morning...you just reapply during every auction depending on the T bill you want...forms are available online at cbk site make sure you drop them at the correct tender box hapo CBK i mean t.bond not t.bill. You have two options. Apply for subsequent bond offers at CBK, primary market. For example you buy a 5 year bond in a certain month then several months later buy a 10 year bond on offer then (or whichever other is on offer). Buy an existing bond in secondary market. For example buy a 5 year bond in a certain month then several months later return to secondary market to buy the same 5 year bond (or any other that is made available for purchase). What are the chances of getting the Infrastructure Bond in the secondary market? Do u know the of the next release of IFB? You have my email...il get you the IFBs... Thanks. I have some maturing cash in October. 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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@maka. would you recommend to someone to buy the TBond for 26th September.I need to take a break from the market and just pack the little money somewhere.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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kasibitta wrote:@maka. would you recommend to someone to buy the TBond for 26th September.I need to take a break from the market and just pack the little money somewhere. Yes though the rates might come in lower than the 10 year that was offered in August(1.16.10)...I would invest its a new 20 year not a reopen rates will still be attractive. possunt quia posse videntur
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Rank: Member Joined: 2/7/2014 Posts: 155
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maka wrote:kasibitta wrote:@maka. would you recommend to someone to buy the TBond for 26th September.I need to take a break from the market and just pack the little money somewhere. Yes though the rates might come in lower than the 10 year that was offered in August(1.16.10)...I would invest its a new 20 year not a reopen rates will still be attractive. Thankyou, though i find the 20 year period too long, but again, if at some point i can sell without so much of haircut.
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