BSEC seeks banks’ co-operation to boost bond market

The Bangladesh Securities and Exchange Commission (BSEC) has sought the cooperation of the heads of treasuries of all banks to make the transactions of government treasury bonds (T-bond) or government securities (G-Sec) vibrant on the secondary market at the stock exchanges. 

On Wednesday, the commission held a meeting with the heads of treasuries of all banks at the BSEC Bhaban in the capital’s Agargaon.

At the meeting, bankers suggested removing the transaction circuit breaker to popularise the bond market.

T-bond’s transaction has a 2 per cent circuit breaker.

Because of this limit, banks are not interested in selling bonds, which is why they hold almost all treasury bonds. As a result, despite the demand in the market, there has been a problem in the supply of bond units. 

Bond transactions now require a commission of Tk 0.10 for every Tk 100, which is transacted free of cost in the Bangladesh Bank’s MI module. Bankers also suggested the bond transaction commission be cancelled. 

Dr Shaikh Shamsuddin Ahmed, acting chairman of BSEC, said bankers have raised various issues at the meeting. “We have assured them that everything the regulator needs to do to make the bond market vibrant will be done.”

Meanwhile, not a single unit of treasury bonds was traded on any bourse on the second day of the trial trading of government securities on October 12 this year.

Earlier on August 23, the BSEC in a letter informed the finance ministry of the “go-live” date. The letter said the bourses would complete mock trading successfully and then finish system production by September 3.

The Bangladesh Bank, the Dhaka Stock Exchange, the Chittagong Stock Exchange, and Central Depository Bangladesh Limited would take the necessary measures to go live formally on September 4, according to the letter.

There are now 221 treasury bonds with a tenure ranging from five to 20 years listed on the Dhaka Stock Exchange. Government bonds are traded between institutional shareholders, including banks and financial institutions.