REVEALED: Amount PFAs invest in 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 N1.49 trillion in Treasury Bills.

PenCom also disclosed that the PFAs have invested N4.22 trillion in Federal Government’s bonds, Federal Mortgage Bank of Nigeria (FMBN) got N10.91 billion; Sukuk bonds, N53.15 billion; and green bonds, N6.96 billion.

“State government securities gulped N154.43 billion, while corporate bonds were N400.45 billion with corporate infrastructure bonds amounting to N7.33 billion, even as banks gulped N849.09 billion.

“Others include commercial papers, N116.76 billion and real estate properties, N226.64 billion and supranational bonds, N6.67 billion.

“Open and close end funds, N12.18 billion; mutual funds, N21.29 billion; private equity fund N38.57 billion; infrastructure fund, N16.07 billion; other assets N24.56 billion and Reits, N9.10 billion.” the commission said.

According to the commission, the total sum invested in Federal Government’s securities by PFAs stood at N5.78trn out of N8.33 trillion pension assets as at August.

“The investment represents 69.30 per cent of N8.33 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 N4.55 billion; Fund II, N3.69 trillion; Fund III N1.96 trillion and Fund IV N619.59 billion.

“It noted that Closed Pension Fund Administrators Fund (CPFAs) is N1.08 trillion and Existing Schemes (ES) N957.50 billion,” it said.

It was  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 N5.8billion, N29.24billion and N112billion for 91-day, 182-day, and 364-day maturity periods respectively.

How you can Buy Treasury Bills 

Assuming you own more than N50 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.

 

Nairametrics

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