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Hi Aaron
I been buying bank preference shares as a replacement for term deposits.
Find them under bonds
TIckers
BNZHA 7.3%
BNZHB 7.28%
ANZBHD 7.6%
or
QHLHA 6.4% Quayside are BOPcouncil investment arm…own POT
Still has some risk but if the banks all get in trouble there probably big trouble elsewhere
DYOR before investing
Last edited by Perky; 15-08-2024 at 07:53 AM.
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Member
Can anyone explain the maths of why IFT330 are quoted as price per 100 $104.320 which is a 4.3% increase on issue price but also quoted at yield of 5.98% vs coupon rate of 6.9% which would indicate an increase of
((6.9 / 5.98) - 1) * 100 = 15.3%.
This formula seems reasonable to me because if yield had halved it would give 100% increase which seems right.
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Originally Posted by Nor
Can anyone explain the maths of why IFT330 are quoted as price per 100 $104.320 which is a 4.3% increase on issue price but also quoted at yield of 5.98% vs coupon rate of 6.9% which would indicate an increase of
((6.9 / 5.98) - 1) * 100 = 15.3%.
This formula seems reasonable to me because if yield had halved it would give 100% increase which seems right.
Maturity 2029. THats 5 years. Yield is quoted till maturity and worked out on a DCF situation.
You pay 1.043 now, get 1.00 in 5 years time and every year get $6.9% per note.
That probably works out to a yield of 5.98% if you pop that in excel.
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Originally Posted by Perky
Hi Aaron
I been buying bank preference shares as a replacement for term deposits.
Find them under bonds
TIckers
BNZHA 7.3%
BNZHB 7.28%
ANZBHD 7.6%
or
QHLHA 6.4% Quayside are BOPcouncil investment arm…own POT
Still has some risk but if the banks all get in trouble there probably big trouble elsewhere
DYOR before investing
I have been doing something similar as existing term deposits mature. I don’t want to buy more ordinary shares, and may need some cash at uncertain date in about a year or two and figure selling preference shares and bonds would be (cheaper and) easier than breaking a TD if necessary.
Last edited by Bjauck; Yesterday at 03:02 PM.
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Originally Posted by Bjauck
I have been doing something similar as existing term deposits mature. I don’t want to buy more ordinary shares, and may need some cash at uncertain date in about a year or two and figure selling preference shares and bonds would be (cheaper and) easier than breaking a TD if necessary.
Serious question, are there real penalties for breaking term deposits?
If banks were smart they would allow the breaking of TD's and price it just like a bond would be priced if interest rates change.
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Originally Posted by blackcap
Serious question, are there real penalties for breaking term deposits?
If banks were smart they would allow the breaking of TD's and price it just like a bond would be priced if interest rates change.
You can give notice 31 days I think . Say it us a 2 year TD & you cut out at say 6 months .They will give you a haircut , generally give you what the 6 month rate would have been .
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Member
I think making it easy to switch banks is a bad idea, it will just open another avenue to fraud, even worse than what happens when phone numbers are wrongly transferred. I think I heard someone say on the news it should be possible to do it on line. Imagine if instead of just losing your phone number, to which codes might be sent, you found your bank accounts gone. If someone wants to change banks let them open new accounts from scratch.
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