Treasury bills

The National Pension Commission (PenCom), in its monthly report released by Peter Aghahowa, the commission’s Spokesman, disclosed that Pension Fund Administrators (PFAs) in the country have invested ₦1.49 trillion in Treasury Bills.

PenCom also disclosed that the PFAs have invested ₦4.22 trillion in Federal Government’s bonds, Federal Mortgage Bank of Nigeria (FMBN) got ₦10.91 billion; Sukuk bonds, ₦53.15 billion; and green bonds, ₦6.96 billion.

“State government securities gulped ₦154.43 billion, while corporate bonds were ₦400.45 billion with corporate infrastructure bonds amounting to ₦7.33 billion, even as banks gulped ₦849.09 billion.

“Others include commercial papers, ₦116.76 billion and real estate properties, ₦226.64 billion and supranational bonds, ₦6.67 billion.

“Open and close end funds, ₦12.18 billion; mutual funds, ₦21.29 billion; private equity fund ₦38.57 billion; infrastructure fund, ₦16.07 billion; other assets ₦24.56 billion and Reits, ₦9.10 billion.” the commission said.

According to the commission, the total sum invested in Federal Government’s securities by PFAs stood at ₦5.78trn out of ₦8.33 trillion pension assets as at August.

“The investment represents 69.30 per cent of ₦8.33 trillion pension assets,” the commission said.

The commission, in the monthly report, also reclassified the pension assets according to the new structures, namely; 1, 11, 111 and 1V multi-fund structures.

“Fund I has ₦4.55 billion; Fund II, ₦3.69 trillion; Fund III ₦1.96 trillion and Fund IV ₦619.59 billion.

“It noted that Closed Pension Fund Administrators Fund (CPFAs) is ₦1.08 trillion and Existing Schemes (ES) ₦957.50 billion,” it said.

Nairametrics had reported that the Central Bank of Nigeria (CBN) was scheduled to hold a Treasury Bills (T-Bills) Primary Market Auction (PMA) on 18th of October, 2018.

It would be offering ₦5.8billion, ₦29.24billion and ₦112billion for 91-day, 182-day, and 364-day maturity periods respectively.

How you can Buy Treasury Bills 

Assuming you own more than ₦50 million and wish to participate directly in the bid, you will have to approach your bank and request a form. Fill the form with your personal information, indicating the amount you want to buy, the tenor, and your bid rate.

The bid rate, otherwise called your stop rate, is the likely interest rate that you have indicated to receive for the principal that you will be investing in the T-Bills.

If you do not own up to the minimum requirement stipulated by the government, you can approach your bank and hope that your request is eligible to be pooled along with others like you. If it is, then you fill the form stipulating the amount, and duration for your bid.

How is the Bid Rate Selected?

The CBN selects the bids that fall below the accepted marginal rates. The marginal rate is the minimum average rate for bids submitted within a bid window.

For example, if the marginal bid rate for a bid opening on 18th October is 11%, then bids falling below this rate will be accepted and those above will be rejected.

Also, you can purchase T-Bills from the secondary market Over-The-Counter (OTC) through a broker.

Famuyiwa Damilare is a trained journalist. He holds a Higher National Diploma (HND) in Mass Communication at the prestigious Nigerian Institute of Journalism (NIJ). Damilare is an innovative and transformational leader with broad-based expertise in journalism and media practice at large. He has explored his proven ability in the areas of reporting, curating and generating contents, creatively establishing social media engagements, and mobile editing of videos. It is safe to say he’s a multimedia journalist.

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