By Fahmeeda Ahmed Raka
The Bangladesh government finally approved the trading of treasury bonds in the secondary market of DSE on October 14, 2021. It will help the investors to invest more in this kind of risk-free security. There are around 222 bonds, valued at fifty-five thousand crore taka which are listed as exclusive bourse in our country. But they were not tradable like shares as there are no rules for trading government bonds in the share market.
This decision will encourage the stock investors to engage more with this kind of bond. According to the central bank's data, there are 264 of these kinds of government bonds available, which are worth tk 2.5 lakh crore from the last 20 years. These securities were traded in between the interbanking ecosystem under the supervision of the Bangladesh Bank. Now, this can be shared between the banks, financial institutions, and institutional shareholders. A person can individually invest in this kind of securities by opening a bond investment account. The central bank officially announced that DSE and BSEC had removed all the barriers regarding trading treasury bonds in the stock market.
Another study showcased that trading government bonds in the share market will cut off the borrowing cost of the government in the long term. This will encourage the government to issue bonds at a lower interest rate. This study also included that individual and institutional investors will be able to protect their equity by investing in this kind of risk-free bond. This will dilute the manipulation of stock trading gradually.
Trading treasury bonds is a significant moment for the capital market which will help to increase the depth of the share market. The investors who are holding treasury bonds in the depository accounts in Bangladesh Bank. Now they have to transfer that to a BO account, then they are able to trade the bonds in the share market.
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