Debt instruments issued by corporations/governments to raise long term capital to finance large projects
time horizon with investments ranging from days to years
investor income and opportunity for capital appreciation
of fixed income securities from several issuers
Long term, consistent investing is critical in wealth management and financial planning.
Invest in Treasury Bills which offer interest over investments held for less than a year.
Buy local and foreign Bonds in Naira, Dollars, Pounds and Euro.
Capital preservation means protecting the absolute value of your investment via assets that have a stated objective of return of principal.
Fixed income securities refer to investments which provide a return in form of fixed periodic interest payments and the eventual return of the principal at maturity.
There are different types of Fixed Income Securities which include Government bonds, Corporate Bonds, Commercial Papers, Treasury Bills, etc.
Fixed income securities are recommended for individuals who want to a fixed return and regular payments on their investment. This is also for individuals who want to avoid market fluctuations.
Some bonds are denominated (and issuer payments made) in a foreign currency, which may fluctuate against your local currency. The impact of such foreign exchange movements may offset any interest or capital gains you may receive from bond investment.
Interest rates and bond prices are inversely related. Should interest rates rise, the price of your bond will tend to fall (and vice versa). The longer the time to maturity of a bond, the greater the interest rate risk.
This is the risk that the bond/bill issuer or borrower is unable to meet the coupon or principal payments on any outstanding bonds or debt (not just the instruments you may be holding) when they fall due (for example, due to bankruptcy or insolvency), and go into default.
A bond is a debt security where the bond issuer (borrower) issues the bond for the purchase by the bondholder (the lender). It is also known as a fixed income security, as a bond usually gives the investor regular or fixed income.
A regular fixed income the client can enjoy over a long-term period, and is capital guaranteed to maturity (subject to credit risk of the issuer)
To access online bonds, make sure you have the SC Mobile App with a valid investment profile. If your investment profile needs to be updated, it can be completed on the SC mobile app or through our online banking.
Securities are financial instruments that show the relationship between a creditor and the corporation or government.
Fixed income security holders are creditors of the issuers, not the owners, while fixed income equity is the owners of the issuers.
Fixed interest rate securities refers to an unchanged rate applied throughout the tenor of an investment while the floating rate fluctuates based on the movement of a pre-determined benchmark.
There are 3 key components when it comes to fixed-income securities. They are credit quality, yield, and maturity.
Credit quality indicates the ability of the issuer of the fixed income security to pay back his obligation.
Yield on a security is the interest provided by security over its life, given its current market price. This is the return earned on a transaction.
Maturity refers to the time period when a financial instrument will cease to exist, and principal is repaid.
A coupon rate is the rate of interest an instrument pays at periodic intervals while the yield is the eld is the rate of return the interest generates.
Long term securities offer more than short term securities because money lent out for a longer time will have a higher yield.
Factors that determine rate are commonly called macroeconomic as they are known to be economy related. The factors include Demand for money, Government borrowings, supply of money, inflation rate, etc.
Auction is a sale where market players make competitive bids on an instrument. It can be used for price discovery.
A coupon rate is the rate of interest an instrument pays at periodic intervals.
A bond redemption is the full repayment of the principal amount (the amount you invested) and any interest owed to date.
The current yield of a bond calculates the rate of return on a bond by using the market price of the bond instead of its face value. Current yield price is derived by dividing the coupon rate by the current price of the bond.
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