Dear Current & Potential Client(s),
This is to inform you that the Federal Government of Nigeria Treasury/Savings/Sukuk Bonds can be bought and sold every day like ordinary stocks starting from a min. investment of N10,000 thereby having a better & active control on Your long-term savings plan and/or Your fixed income investment portfolio.
Definition: FGN Savings Bills (FGN S-Bills) are FGN Savings Bonds with TTM less than or equal to 12 months, for example FGS2019S1, FGS2019S2, FGS2019S4, FGS2019S6, FGS2019S8, FGS2019S10, FGS2019S12, FGS201914, FGS201916 & FGS201918 are now S-Bills…
The Key Features of FGN Savings Bonds Bought On Secondary Market are as follows:
- Coupon payments: Quarterly (interest payments 4x in a year) with initial coupon payment depending on the FGN S-bond’s coupon program thus your first coupon payment can be paid in less than 91 days;
- Interest rate: 9.5% – 14.8% p.a
- TTM (time-to-maturity): 3 months – 36 months;
- Cheaper & long-term alternative to FGN T-bills (FGN S-bonds are also known as revolving 91-day FGN T-bills);
- NGSE Purchase/Sales Sizes: Minimum order of NGN 10,000 with additional multiples of NGN 1.00
The Key Features of FGN Treasury/Sukuk Bonds Bought On Secondary Market are as follows:
- Coupon payments: Half-year (interest payments 2x in a year) with initial coupon payment depending on the FGN T-bond’s coupon program thus your first coupon payment can be paid in less than 182 days;
- Interest rate: 12.5% – 16.8% p.a
- TTM (time-to-maturity): 1 yr – 20 yrs;
- NGSE Purchase/Sales Sizes: Minimum order of NGN 10,000 with additional multiples of NGN 1.00
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TRW Stockbroker Investment Recommendation:
Take note that the best future predictor of Your bond yield (interest income flow) is your initial coupon level so please try to attain a higher coupon level for Your bond investments. For example, interest cashflow from a 13% p.a coupon is greater than that from a 10% p.a coupon !!!
Oct-2018 inflation was flat @ 11.26% while Nov-2018 & Dec-2018 inflation(s) are forecast to rise to 11.28% & 11.63% respectively. Last week, average FGN T-bills’ & FGN T-bonds’ secondary market yields stabilized @ 14.4% and @ 15.5% respectively on the FMDQ thus maintaining the positive real return and normalization (bullishness) of the local NGN yield curve.
Average Nov-2018 yield of FGN T-bill, 91-days on the FMDQ PMA was 11.23% p.a while Dec-2018 ”forecasted” average yield of FGN T-bill, 91-days on FMDQ PMA is not available due to the cancellation of NTB PMAs by DMO in the month of December. The last PMA of N24.37bln of FGN T-bills, 91-days was executed at a flat rate of 10.9% p.a
Average Nov-2018 yield of FGN T-bond 14.5% JUL-2021 on the FMDQ PMA was 15.11% p.a while Dec-2018 ”forecasted” average yield of 14.5% FGN JUL-2021 on FMDQ PMA is 15.35% p.a.
N.B: Take note that 91-day FGN T-bills have similar interest payment structure to the 2-3 yrs FGN S-Bonds thus a FGN S-bond can be called ”a revolving 91-day FGN T-bill. Invest in FGN S-bonds only for savings purposes and as a cheaper alternative to FGN T-bills, please do not speculate with them !!!
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Based on the above recommendations, clients’ feedback and in order to maintain it’s FGN bonds market maker & warehousing role on the NGSE, our ARMF Bond Portfolio (a prop closed fund) is providing the following product options to clients interested in creating/maintaining their own savings scheme/portfolio:
Product Option #1: FGN Bonds Fire-Sell Bid
- If a client wants to fire-sell his/her FGN bonds with coupon >14% p.a, our ARMF Bond Portfolio can bid a max. bid clean price of N900.00 per bond.
- If a client wants to fire-sell his/her FGN bonds with coupon btw 13% – 14% p.a then our ARMF Bond Portfolio can bid a max. bid clean price of N850.00 per bill.
- If a client wants to fire-sell his/her FGN bonds with coupon <13% p.a then our ARMF Bond Portfolio can bid a max. bid clean price of N800.00 per bill.
Product Option #2: Get Upfront Quarterly Interest Payment On Your FGN Bonds Purchase
For a min. N100,000 investment, a bond client who desires to buy 2 – 3 yrs FGN S-bonds via DMO primary auction and/or on the NGSE secondary bond market (via TRW Stockbrokers Ltd) will be paid upfront his/her expected quarterly interest by our ARMF Bond Portfolio directly into the client’s bank acct or into the client’s CSCS trading acct with TRW Stockbrokers as mandated.
For a min. N100,000 investment, a bond client who desires to buy 1 – 20 yrs FGN T-bonds via DMO primary auction and/or on the FMDQ secondary bond market (via TRW Stockbrokers Ltd) will also be paid upfront his/her expected half-year interest on a quarterly basis by our ARMF Bond Portfolio directly into the client’s bank acct or into the client’s CSCS trading acct with TRW Stockbrokers as mandated.
ARMF Bond Portfolio will surcharge a 10% funding fee. The process will revolve every quarter beginning till maturity unless the client makes an urgent sales mandate before maturity. The purchased FGN T-bonds are kept under the custody of TRW Stockbrokers Limited.
For example, a successful primary auction bid of N100,000 investment in a 3-yr FGN S-bond this Sept-2018 DMO PMA (FGS202137: 12.364% FGNSB 12 SEPT-2021) would receive (at the beginning of every quarter) a gross upfront quarterly interest of N3.091 minus a 10% funding charge of N309.10 => a net upfront quarterly interest of N2,789.10
Product Option #3: Additional Proposal To Fellow Stockbrokers:
If a stockbroker is already marketing the FGN Bonds to it’s retail clients and these clients want to buy/sell urgently, our ARMF Bond Portfolio can sell/purchase small and/or large volumes of pre-negotiated FGN T-bonds & FGN S-bonds (via secondary market transactions) from/to the stockbroker and/or it’s clients.
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TRW Stockbroker Transaction Fee Policy:
Fixed income trades of the bond segment of the NGSE trading platform are subject to the following term(s): transaction fee of 1% of total consideration will be charged for both “Sell” and/or “Buy” transaction(s) while CSCS will charge N5.20 for it’s trade alert & custodian services;
Fixed income trades of the bond segment of the FMDQ trading platform and onward custodian transfer to client’s CSCS account are subject to the following term(s): combined ‘transaction, custodian & transfer’ fee of 1% of total consideration plus N5.20 for CSCS charges both “Sell” and/or “Buy” transaction(s).
Caution – selling bonds on the secondary market before maturity, can either incur capital loss or capital gain !!!!
Should you require further information on how to get the best (and higher) coupon for Your FGN bonds purchase, please contact directly Ekwueme Mike Anyadibe (080 6656 4748 and/or e-mail: ekwueme.anyadibe@trw-stockbrokers.com and/or live during trading hours via skype #ID: respartner): Fixed Income Sales.
Thank you…
TRW BOND TEAM
Corporate Office: 62/64 Campbell Street (Kajola House)
4th Floor Lagos Island Lagos .
234-1-7646689,234-1-2710224-5
Email: info@trw-stockbrokers.com; ekwueme.anyadibe@trw-stockbrokers.com
website: http://www.trw-stockbrokers.com
