BSEC urges bankers to help develop bond market

The Bangladesh Securities and Exchange Commission (BSEC) has asked banks in the country to help develop the local bond market by increasing their participation in buying and selling the debt securities.

The BSEC made this request during a meeting with various bankers and institutional investors at its office in Dhaka yesterday.

"The bond market is an important source of long-term financing and it has huge potential in Bangladesh," said Shaikh Shamsuddin Ahmed, a commissioner of the BSEC.

As such, the BSEC is giving full-effort to make the bond market more sustainable and useful for entrepreneurs in the country, he added while chairing the meeting.

With this backdrop, he requested all institutional investors to actively participate in the bond market.

Bankers at the meeting said the high cost of secondary trading, lengthy approval process, artificial interest rates and current bond yield system were the main reasons for the present status of the bond market.

The BSEC had launched the secondary market for trading bonds on October 11, 2022. However, overall trading in the market still amounts to less than Tk 15 crore, as per data of the Dhaka Stock Exchange.

Selim R F Hussain, president of the Association of Bankers, Bangladesh, and representative of Standard Chartered Bank and Citibank was present at the event.

In a separate meeting with asset management companies, the BSEC ordered them to raise their participation in the stock market and attract more investors to the mutual fund sector.

Mizanur Rahman, another commissioner of the BSEC, said asset management companies and fund managers should invest through the proper process and ensure investors' interests.

He also urged for proper reporting and following compliances.

"Fund managers should follow all the best practices in their operations," Rahman said while chairing the meeting.

Mohammad Rezaul Karim, spokesperson of the BSEC, suggested the asset management companies to create new funds in the market by increasing their investments.

"All fund managers should work together to increase awareness among investors about mutual funds," he added.

A mutual fund is a financial vehicle operated by professional managers to gather money from shareholders to invest in securities like stocks, bonds, money market instruments, and other assets to produce capital gains or income to be shared as dividend.