Bond market goes online tomorrow

Posted by BankInfo on Sun, Dec 16 2012 06:55 am

The central bank will launch an online trading platform for government treasury bonds and bills tomorrow, opening up an easy market for both institutional and individual investors.

The launch of the platform -- Trader Work Station -- will meet a long-pending demand, as the existing secondary bond market in the stock exchanges is still inactive, especially for government treasury bonds and bills. A bond is a debt instrument.

Bangladesh Bank issued a guideline last week for the sales of Bangladesh Government Treasury Bond (BGTB) and bills in the secondary market.

BB Governor Atiur Rahman will inaugurate the platform, a central bank official said yesterday.

Anis A Khan, managing director of Mutual Trust Bank, said Bangladesh lags far behind the advanced and regional countries where the secondary bond market is vibrant.

“However, we appreciate the introduction of the platform,” he said.

The secondary bond market may not be lucrative for investors right now due to the present economic condition of the country. “But it will be lucrative in the long run."

Online trading will expand the bond market at the secondary level, bring innovations in market-based rate and smooth participation of investors -- both individual and institutional, according to the BB guideline .

The guideline said individual or institutional investors can participate in trading in the platform through primary dealer or scheduled banks and financial institutions having current accounts with the BB.

The market value of all treasury bills and bonds, yield, amount, date of issuance and date of expiry will be shown on the ticker screen of the website.

Any buyer or seller can place orders on the platform through his bank for buying or selling all government treasury bills on the price or yield shown on the ticker screen, the guideline said.

It said T+0 trading system will be followed in settlement of purchase and sale of BGTB or treasury bills through the platform. The T+0 means, the trading will be settled on the same day.

The ticker screen will show the total sales of securities, highest and lowest market rates, yield and the total value of securities purchased and sold in a day.

If necessary, the central bank will impose circuit breaker to prevent any abnormal fall or rise in the market price. The market watch screen of the platform has the option of monitoring market-related information and data.

Detailed information of all orders, sale and purchase of securities can be seen on the market watch screen.

The members can get detailed information of each of their orders from the order book of the platform and, if necessary, cancel or change their orders, according to the guideline.

News: The Daily Star/Bangladesh/16th-Dec-12