Trading of govt bonds takes place

The trading of treasury bonds and bills took place on the stock exchanges of Bangladesh today, a day after their debut.

There are about 270 treasury bonds worth more than Tk 2.5 lakh crore with their tenures ranging from two years to 20 years, data from the Bangladesh Bank showed.

Of them, 222 treasury bonds were listed on the Dhaka Stock Exchange (DSE) as of August, with a combined value of Tk 59,359 crore. But they were not traded like shares and mutual fund units and they could be bought and sold only over the counter.

But it changed for the better on Monday as the BSEC allowed treasury bills and bonds to be traded like stocks and mutual fund units, albeit on a trial basis.

No items, however, could change hands on the exchanges because of a technical glitch on the day. 

Data migration could not be completed on time so trading was not possible although there were some buy orders, said the DSE.

But several treasury bonds were traded on the DSE and the Chittagong Stock Exchange yesterday.

Thanks to the commencement of the trading of government securities, Bangladesh has taken a major leap forward by making them easily available to investors through the exchanges and diversifying the product base.

However, the lot of the bonds is 1,000 with a face value of Tk 100 means investors need to pay at least Tk 1 lakh or above to buy a single set of securities. As a result, small investors did not show much interest in buying them.

While stocks are ownership in a company, bonds are a loan to a company or government. Because they are a loan, with a set interest payment, a maturity date, and a face value that the borrower will repay, they tend to be far less volatile than stocks.