Bourses likely to see some supply of treasury bonds
Stock exchanges appeared to have had a level playing field in the secondary market trading of treasury bonds as the Bangladesh Bank, last week, imposed a Tk100 fee per transaction of the government securities on its own platform.
Market people believe that the supply scarcity of treasury bonds may be eased to some extent as both the competing platforms now cost investors more or less against each trade.
The market infrastructure (MI) module, where dealer banks and financial institutions trade treasury bonds either for themselves or on behalf of their clients, was not charging anything against the trades. But the trades of the same instruments at the new treasury bond trading platforms on the Dhaka and Chattogram bourses were costing investors Tk0.1 against Tk100 turnover.
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The treasury trading platforms, launched last year on the bourses, have been going through a serious shortage of supply as the large existing investors of treasury bonds, mainly banks, non-bank financial institutions, insurers and some capital market entities, were not interested in the exchange platforms because of the brokerage fees.
Only a handful of treasury bond trades took place on the exchange platforms in their first three months throughout last December. No trade had taken place there until a top tier brokerage firm Lanka Bangla Securities recently built its inventory of a large number of treasury bonds to cater to the growing demand among general investors for the lucrative fixed income securities issued by the government.
Abul Ahsan Ahmed, head of portfolio management at IDLC Investments, told TBS, "The fee in the MI module would help dealer banks earn some revenue and they would be encouraged to serve clients interested in buying or selling the government bonds."
Now, the large investors might look for buyers at the bourses if offered a better rate, he said, adding that a robust exchange trading ecosystem should help build a vibrant secondary market of bonds that could engage a diversified group of investors.
