A total of 253 government bonds will be traded live from Monday next in a move to help diversify the local capital market.
The Bangladesh Bank (BB) on Thursday issued a circular in this connection.
Currently, the local capital market mainly consists of risky equity securities.
The general investors will be able to buy or sell the government bonds from the day on the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) trading platforms, people familiar with the matter at the BB told the FE.
"Although the trading now will be on a trial basis, the investors will be able to participate in the trading on both the exchanges," said an official at the debt management department of the BB.
Usually, there is a secondary trading platform of the G-securities called MI module and only some limited financial institutions participate in it. The MI module, in fact, is not a secondary trading platform.
Each government bond or risk-free fixed-income instrument has a face value of Tk 100. But the investors will have to buy at least a lot of 1000 bonds worth Tk 100,000.
Such trading will enhance the demand for fixed income instruments in the market. And the government may issue more bonds to raise funds from the capital market which will be cost-effective.
However, the yields of the bonds are: 2-year bond -- 7.45 per cent (annualized), 5-year bond -- 7.77 per cent, 10-year bond -- 8.1 per cent, 15-year bond -- 8.5 per cent and 20-year bond -- 8.55 per cent, according to the auction results of September.
In another development, a disclosure posted on the websites of the Dhaka and Chattogram bourses on Thursday has confirmed the date of commencing the trial trading in the government securities.
"It is to be mentioned that trading in Govt. Securities shall be settled accordingly," said the disclosure.
Bangladesh Bank (BB) Governor Abdur Rouf Talukder said on Monday last trading in government securities would commence on a trial basis from the next week.
In his speech, the governor said entrepreneurs would be able to collect working capital from the bond market if its proper development could be ensured.
Earlier, the trading in government securities was supposed to start on August 16 last in line with an instruction of the securities regulator.
But the exchanges were not able to commence the trading as some preparations remained incomplete.
Stakeholders such as Bangladesh Bank (BB), Bangladesh Securities and Exchange Commission (BSEC), both the bourses and the depository authority, CDBL, signed a memorandum of understanding (MoU) on June 12 last on trading of the government securities such as T-Bonds in the secondary market.