• Sunday, Feb 05, 2023
  • Last Update : 10:24 am

2020 was a break through year for bonds

  • Published at 06:04 pm December 28th, 2020
Bond issuers in 2020

This year, the amount raised through bonds is almost double that average of the past seven years, suggesting the country’s moribund bond market is finally getting the much-needed impetus

The stock market regulator this year approved 23 companies to raise a total of Tk 9,017 crore from the capital market by issuing a bond, a higher than average amount.

Between 2012 and 2019, the amount raised through averaged around Tk 5,000 crore.

But this year, the amount is almost double, suggesting the country’s moribund bond market is finally getting the much-needed impetus.

“Our stock market has remained only equity-based. I will focus on launching bonds, debentures, Sukuk and alternative investment funds in the market,” Shibli Rubayet ul Islam, chairman of the Bangladesh Securities and Exchange Commission.

Islam took charge of the country’s securities regulatory body in May.

As many as 85 per cent of the approvals were given the new commission.

Coincidentally, the approvals for bond issuance came at a time when the economy was reeling from the fallout of the global coronavirus pandemic, suggesting the companies are not engulfed in doom and gloom.

The funds would largely help in increasing the strengthen the capital base and ultimately help the economy to recover at a faster pace.

Meanwhile, the country’s moribund secondary bond market got a shot in the arm after the securities regulator recently allowed treasury bonds to be traded through the beneficiary owner’s (BO) accounts.

The instructions have been dispatched to resolve all legal issues very soon. 

Currently, in Bangladesh, there is no secondary market activity of the bonds and it makes the bond market almost non-functional.

“There had been many reform initiatives in the stock market in the last few years, but I would try to implement those reforms. If these are implemented, the stock market would be sustainable for a long time,” Islam added.

The expected growth of the capital market will be possible when there is a good mix of instruments, said Rezaul Karim, executive director and spokesperson of the BSEC.

The recent reforms of the capital market will help to achieve the expected levels of economic growth, he added. 

“I welcome this move,” said Abu Ahmed, an honorary professor of the Dhaka University’s economics department.

But there should be specific directives for introducing a secondary bond market where government-sponsored bonds can be traded.

This will encourage the private sector to issue more bonds for raising capital for long-term investment, he added. 

A total of 221 treasury bonds are listed on the stock exchange. Treasury bonds of five, 10 and 15 years of tenure began to be listed on the Dhaka bourse from 2005.

The 13 recommendations made by a tripartite committee to facilitate the trading of government securities in the secondary market of the stock exchanges. 

The nine-member committee is headed by Khurshid Alam, general manager of the BB’s debt management department, and comprises officials of the BSEC and the Dhaka Stock Exchange.

The committee suggested that the government provide policy support to engage non-resident Bangladeshis in the country’s bond market and give fiscal support for the investors for the development of the secondary bond market.


Facebook 50
blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail