Stakeholders on Sunday signed a memorandum of understanding (MoU) to commence trading of Treasury Bonds (T-bonds) aiming to activate the country's bond market.
The representatives of Bangladesh Bank (BB), Bangladesh Securities and Exchange Commission (BSEC), DSE, CSE and CDBL signed the MoU at a programme held at the ministry of finance (MoF).
The representatives of the stock exchanges said T-bonds are likely to make debut trading in the secondary market in early July as their platforms have been prepared.
Abdur Rouf Talukder, senior secretary of finance division, attended the programme as the chief guest while the secretary of financial institutions division (FID) Sheikh Mohammad Salim Ullah was the special guest.
"A vibrant bond market will be visible through the trading of T-Bonds and the market capitalisation of the capital market will also be enhanced at this," said Mr. Rouf.
He said dependency on bank loans and the amount of non-performing loans will be declined through a vibrant bond market.
After commencing the trading of the T-bonds, general investors will be able to purchase and sell T-bonds through the BO (beneficiary owner's) accounts used to conduct trading in the capital market.
The offer price of the T-bonds will be Tk 100 per unit a market lot will comprise 1000 units.
As a result, the offer price of a lot of the T-bonds will be Tk 0.1 million.
In his speech, the FID's secretary Sheikh Mohammad Salim Ullah said the MoU has paved the way of conducting trading of the T-bonds in the secondary market.
"A vibrant bond market will be established through the trading of T-bonds," the secretary said.
It said the sellers of the T-bonds will get accrued interest/profit and the buyers or coupon holders will get coupon price in bank account through BEFTN on coupon date.
"As a result, there is no possibility of incurring losses making investment in T-bonds. Investment risk will be reduced through diversification of investors' portfolios," said a BSEC press release.
It said yield-curve will also be available from the T-bonds to be traded in the secondary market.
Rehana Perven, additional secretary at finance division, Shaikh Shamsuddin Ahmed, a BSEC commissioner, Kazi Sayedur Rahman, a deputy governor at central bank, Shuvra Kanti Chowdhury, CEO at CDBL, Abdus Salam Sikder, chairman at Central Counterparty Bangladesh Ltd., Asif Ibrahim, chairman at CSE, Md. Eunusur Rahman, chairman at DSE, also spoke at the signing ceremony.
Md. Abul Kalam, a BSEC director, Khandakar Siddiqur Rahman, a BB director, Tarique Amin Bhuiyan, DSE managing director, Md. Ghulam Faruque, managing director (in charge) of CSE, Shuvra Kanti Choudhury, CDBL managing director, signed the MoU on behalf of their respective organisations.
Previously, a total of 222 treasury bonds were listed with the bourses.
General investors had no access to the MI (market infrastructure) module introduced by the central bank for the transaction of the T-bonds.
To commence trading of the T-bond, the BB's MI module has been integrated with the trading software of both the stock exchanges.