Welcome to my confessions of a retail investor in Africa.
I like investing in treasury bills because they provide a guaranteed income and my money is not held up for too long.
As a retail investor in Africa, my investments are usually in fixed income e.g. Treasury Bills, Treasury Bonds; or Shares on Stock Exchanges. In later posts will go into why I mainly invest in those.
Today my focus is Kenyan bonds and why I like them as a place to invest or get my money working for the short term. My motto is that money is a slave, it should never sit in an account but be out there making me more money.
3 reasons why I like Kenyan Treasury Bills
The rates are good
Kenyan treasury rate bills are regularly quite high (see diagram below), and a better return in comparison to some savings accounts. Current 364 day Treasury Bill rate is 9.78% which is better than anything I have seen at a reputable bank in East Africa or in the UK.
These rates are not unique for African treasury bills due to the perceived risks of their economies, bringing me to the second point.
Kenya 364 Day Treasury Bill Rates
The Kenya Shilling is performing well
One of the big worries about treasury bills is that whatever return you make will be eaten by currency depreciation/falls.
The great thing about the Kenya Shilling over the last year is that only fallen by about 2% against what has been a strong dollar. So even if I adjusted my 364 Day Treasury Bill for currency (9.78% – 2% ) would still have a return of 7.78% which I will take any day over what my savings account pays.
Kenya Shilling Vs US Dollar over last year
Treasury Bills are issued regularly
Kenya currently runs weekly auctions for new treasury bills. This means that whenever I have some money I don’t have to wait long to buy a treasury bill and get my money working for me.
How I buy my Kenya treasury bills
The way I currently buy treasury bills is by emailing my broker to a scanned signed mandate form stating length and size of bind, and send funds usually using WorldRemit.
The value of investments can go down in value as well as up, so you could get back less than you invest.
Past performance does not necessarily indicate a financial product’s future performance.
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