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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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winmak wrote:what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it
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Rank: New-farer Joined: 3/28/2016 Posts: 37 Location: nairobi
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heri wrote:winmak wrote:what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it This even after Ivor Coast's Eurobond was over subscribed? What your view on this and Kenya's likelihoods to refinance?
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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kediveKed wrote:heri wrote:winmak wrote:what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it This even after Ivor Coast's Eurobond was over subscribed? What your view on this and Kenya's likelihoods to refinance? I hear that IMF has given Kenya some conditions on debt sustainability to be met in the next 3 years and one of them is Debt/GDP ratio . So I hear that refinance would be a problem because of where our ratio is
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Rank: Member Joined: 12/1/2007 Posts: 539 Location: Nakuru
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heri wrote:winmak wrote:what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it How so? Default manenoz? What is the likelihood of this happening? For investors as a whole, returns decrease as motion increases ~ WB
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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winmak wrote:heri wrote:winmak wrote:what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it How so? Default manenoz? What is the likelihood of this happening? NEVER SAY NEVER! Look at Ghana. That said... it is highly unlikely, but not impossible, for a country to default on its debt in its currency. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 11/17/2009 Posts: 398 Location: Where everyone knows you
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i think that it is impossible for Kenya to default on payments on T Bills & Bonds that are in local KES.
If they did that, most Banks, Pension Funds, Mutual Funds etc.in Kenya would collapse.
Just check their Balance Sheets, to see how much they have invested in these.
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Rank: Member Joined: 7/1/2009 Posts: 256
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MatataMingi wrote:i think that it is impossible for Kenya to default on payments on T Bills & Bonds that are in local KES.
If they did that, most Banks, Pension Funds, Mutual Funds etc.in Kenya would collapse.
Just check their Balance Sheets, to see how much they have invested in these. I'm not a finance expert, but in my view, the gov has already technically defaulted at least twice in the recent past. I recall local lenders to KQ being forced into a debt for equity swap in 2017. Technically, as guarantor, they defaulted. More recently, instead of refunding OMCs subsidies, they convinced them to swap debt for bonds. Some of that debt (for those who held out) is still outstanding. When US Export-Import bank issued Kenya with a default notice last year(guaranteed KQ loan again), they couldn't pull the move they had previously done with local banks. Clearly, there is precedent of local debt restructuring.
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Rank: New-farer Joined: 3/28/2016 Posts: 37 Location: nairobi
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Monk wrote:MatataMingi wrote:i think that it is impossible for Kenya to default on payments on T Bills & Bonds that are in local KES.
If they did that, most Banks, Pension Funds, Mutual Funds etc.in Kenya would collapse.
Just check their Balance Sheets, to see how much they have invested in these. I'm not a finance expert, but in my view, the gov has already technically defaulted at least twice in the recent past. I recall local lenders to KQ being forced into a debt for equity swap in 2017. Technically, as guarantor, they defaulted. More recently, instead of refunding OMCs subsidies, they convinced them to swap debt for bonds. Some of that debt (for those who held out) is still outstanding. When US Export-Import bank issued Kenya with a default notice last year(guaranteed KQ loan again), they couldn't pull the move they had previously done with local banks. Clearly, there is precedent of local debt restructuring. Good point but if the government restructures local debt such as a bonds, doesnt that amount to an arrangment with creditors which would also amount to an event of default under Eurobonds. My thinking is based on the assumption that Eurobonds have cross default obligations. The examples you have given above must have been implemented in a manner that does not trigger the cross default provisions in Eurobonds. I could be wrong though. However, i do think in most part that eurobond holders and local bond holders are in some form of "lockstep".
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Rank: Member Joined: 12/1/2007 Posts: 539 Location: Nakuru
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coupon rate 18.42%... non competitives fully allocated!!! For investors as a whole, returns decrease as motion increases ~ WB
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Rank: Elder Joined: 6/23/2009 Posts: 13,515 Location: nairobi
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VituVingiSana wrote:winmak wrote:heri wrote:winmak wrote:what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it How so? Default manenoz? What is the likelihood of this happening? NEVER SAY NEVER! Look at Ghana. That said... it is highly unlikely, but not impossible, for a country to default on its debt in its currency. Remember Greece.. That country was almost closed down
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: New-farer Joined: 3/28/2016 Posts: 37 Location: nairobi
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obiero wrote:VituVingiSana wrote:winmak wrote:heri wrote:winmak wrote:what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it How so? Default manenoz? What is the likelihood of this happening? NEVER SAY NEVER! Look at Ghana. That said... it is highly unlikely, but not impossible, for a country to default on its debt in its currency. Remember Greece.. That country was almost closed down Wait. I thought Greece was using the Euro which is a shared currency. This is factually different from kenya which uses KES alone.
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Rank: Member Joined: 8/25/2015 Posts: 839 Location: Kite
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Hii DhowCSD ya CBK haitumi message ya reset password nowadays?
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Rank: Member Joined: 8/25/2015 Posts: 839 Location: Kite
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Taurrus wrote:Hii DhowCSD ya CBK haitumi message ya reset password nowadays? Seems the password for DhowCSD has short shelf life!
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Rank: Member Joined: 4/15/2008 Posts: 202
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winmak wrote:coupon rate 18.42%... non competitives fully allocated!!! GoK needs to find or improve on it's sources of dollars if it is to bring down that interest rate I see this rate going a little higher but as we approach years end any other IFB will start going down. Especially if the SGR phase-2B money comes in. I wish they could focus heavily on Agri business coz that's probably where they can get the extra dollars Do it today! Tomorrow is promise to no-one.
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Rank: Member Joined: 8/4/2009 Posts: 48
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What could be the issue with the coupon of IFB1/2023/6.5 with a coupon rate 17.9327 %, someone has gotten an alert of coupon payment of 80,024.7 for an investment of 1,050,000 whereas it should be 94,146.675.
Is this an oversight, IFB are tax free and it shouldn't be hard to calculate the interest rate here.
Is there anything we're missing?
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Rank: Member Joined: 6/14/2010 Posts: 521 Location: Nairobi
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samdoe wrote:What could be the issue with the coupon of IFB1/2023/6.5 with a coupon rate 17.9327 %, someone has gotten an alert of coupon payment of 80,024.7 for an investment of 1,050,000 whereas it should be 94,146.675.
Is this an oversight, IFB are tax free and it shouldn't be hard to calculate the interest rate here.
Is there anything we're missing? Might be a careless computation error in the alert
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Rank: Elder Joined: 7/22/2008 Posts: 2,703
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samdoe wrote:What could be the issue with the coupon of IFB1/2023/6.5 with a coupon rate 17.9327 %, someone has gotten an alert of coupon payment of 80,024.7 for an investment of 1,050,000 whereas it should be 94,146.675.
Is this an oversight, IFB are tax free and it shouldn't be hard to calculate the interest rate here.
Is there anything we're missing? Depends on who they bought the bond from. If they bought it in the secondary market they may have spent Ksh. 1,050,000 but that does not mean they got Ksh. 1,050,000 worth of bonds. The seller made a profit of the original note and the buyer got less bonds so the buyers yield is 16 percent.
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Rank: Veteran Joined: 11/11/2006 Posts: 972 Location: Home
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samdoe wrote:What could be the issue with the coupon of IFB1/2023/6.5 with a coupon rate 17.9327 %, someone has gotten an alert of coupon payment of 80,024.7 for an investment of 1,050,000 whereas it should be 94,146.675.
Is this an oversight, IFB are tax free and it shouldn't be hard to calculate the interest rate here.
Is there anything we're missing? Noticed the same with my coupon. The computation deducts 15% withholding tax. Had to check prospectus if indeed it was a tax free bond. Hope they correct this soonest.
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Rank: Member Joined: 8/4/2009 Posts: 48
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holycow wrote:samdoe wrote:What could be the issue with the coupon of IFB1/2023/6.5 with a coupon rate 17.9327 %, someone has gotten an alert of coupon payment of 80,024.7 for an investment of 1,050,000 whereas it should be 94,146.675.
Is this an oversight, IFB are tax free and it shouldn't be hard to calculate the interest rate here.
Is there anything we're missing? Noticed the same with my coupon. The computation deducts 15% withholding tax. Had to check prospectus if indeed it was a tax free bond. Hope they correct this soonest. Dear Investor, the message for the coupon payment for the security IFB1/2023/6.5, due to be paid on 13 May 2024, contains an anomaly in the computation of the coupon amount. The anomaly has been corrected, and you will be credited with the full coupon in two tranches on 13 May 2024.
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Rank: Veteran Joined: 6/17/2009 Posts: 1,619
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holycow wrote:samdoe wrote:What could be the issue with the coupon of IFB1/2023/6.5 with a coupon rate 17.9327 %, someone has gotten an alert of coupon payment of 80,024.7 for an investment of 1,050,000 whereas it should be 94,146.675.
Is this an oversight, IFB are tax free and it shouldn't be hard to calculate the interest rate here.
Is there anything we're missing? Noticed the same with my coupon. The computation deducts 15% withholding tax. Had to check prospectus if indeed it was a tax free bond. Hope they correct this soonest. Now a proposed 5% withholding tax on infrastructure bonds in the Finance bill 2024.
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