The Dhaka Stock Exchange (DSE) held an awareness programme on Monday titled “The basics of government securities and trading on the stock exchange platform” as part of a series of initiatives aiming to speed up trading of government securities.
The premier bourse held the awareness programme with the participation of heads of operations and authorised representatives of TREC holders at the DSE premises.
The government treasury bonds started trading from October 11 last year in the secondary market after ending a wait of more than a decade and creating one more investment tool for the retail investors reliant only on shares and mutual funds.
With that, 250 treasury bonds worth Tk 31.68 billion of market capitalisation become a new product for investors. Individual investors can now buy and sell risk-free securities trading of treasury bonds.
Although three months have passed, treasury bonds trading on the premier bourse yet to get momentum due mainly lack of awareness among investors.
“Our capital market is basically an equity based market. We want to increase the number of equities as well as debt securities on the exchange,” said DSE Managing Director (Acting) M. Shaifur Rahman Mazumdar at the programme.
He said there is some difference between equity and bonds. If those who are providing services as capital market intermediaries do not know the issues properly, then they will not be able to explain the issues properly to the investors.
“As long as we do not increase the number of corporate bonds in line with the equities, the market will not balance,” he said.
Presently, the number of listed corporate bonds at the bourse is very low. Currently, there are two ways to issue bonds, first through private placement and secondly through initial public offerings.
“The bonds issued through IPOs are not being subscribed as expected due to lack of proper awareness,” said Mr Mazumdar.
In order to establish a vibrant bond market, investors need to be informed about the debt products accurately, he said.
“It will be your responsibility to properly understand the topics that will be discussed in the event and explain them to the investors. And through this, the bond market will expand rapidly,” he said.
Abu Nur Muhammad Hasanul Karim, DSE head of the system and market administration, presented a keynote paper on the government securities.