Bangladesh has started trading in government bonds and bills on a trial basis on the Dhaka and Chattogram stock exchanges. In the hour after trading began at 9:30 am on Monday, no transactions involving the government securities were recorded on the Dhaka Stock Exchange website, bdnews24.com reports.
Over 250 treasury bonds are listed for trading. Brokerage houses have not yet received word on when these securities will begin trading regularly. Government securities are traded separately on the DSE and CSE websites.
On Aug 3, Bangladesh Bank Governor Abdur Rouf Talukder said government securities would start trading after official formalities were completed, adding that some regulations had to be followed on the matter.
Bangladesh Bank then issued a notice stating that treasury bills and bonds would start trading on a test basis on the Dhaka and Chattogram stock exchanges on Oct 10. Individuals and institutions will get the chance to buy and sell these government securities.
To finance debt, the government borrows from banks, individuals, and institutions. They then issue treasury bills and bonds to their lenders, which are known as government securities.
Those with a period of maturity from three months to a maximum of one year are called bills, while those maturing between 1-20 years are called bonds.
The current interest rate on government securities is a maximum of 8.55 per cent. The bond issuer will make interest payments every six months, a standard practice.
The government has defined a limit for the number of savings certificates individuals can purchase, but has not put any such limits on the purchase of bills and bonds. However, those who wish to buy these securities must open a business participant ID (BP ID) at a commercial bank.
Transactions in the capital market will be done through the investor’s beneficiary owners' accounts.
The trading of treasury bills and bonds will add Tk 750 billion to the valuation of the DSE, according to Mohammad Rezaul Karim, executive director and spokesman for the Bangladesh Securities and Exchange Commission.
