Ten bonds worth Tk one lakh each were traded on DSE for Tk 9.50 lakh on the first day of the year.

Treasury bonds worth Tk1,010 crore having five years and 10 years maturity periods have been enlisted on the DSE. The 5-year bonds offer 7.5 percent interest while 10-year bonds offer 8.5 percent.

Of the bonds, five-year bonds are valued at Tk667.70 crore and the 10-year bonds are valued at Tk342.67 crore.

Dhaka City Corporation Mayor Md Sadeque Hossain formally inaugurated the trading of the bonds. Chairman of Securities and Exchange Commission (SEC) Mirza Azizul Islam was also present at the function.

Speaking on the event, the SEC chief said investors should have options to invest in different types of instruments with minimal risks.

The stock markets in Bangladesh have so far been mostly equity-based lacking diversification, he added.

He hoped that not only the institutional investors but also the individual investors will be able to participate in the trading of these bonds.

Although initially the market lot of treasury bonds cost Tk one lakh, steps will be taken to reduce this investment rate to attract small investors, the SEC chief added.

Indicating market depth in the capital market an essential tool for the development of the country, he said, market depth in Bangladesh is less than that of other neighbouring countries.

Pointing to the high tax which the central bank will deduct while making coupon payment, DSE President Ahmed Iqbal Hasan called the capital market watchdog to take steps to reduce the existing 20 percent tax for the treasury bonds for the sake of small investors.

Being a new one, the concept of treasury bond is not yet clear to the investors, Dhaka City mayor said adding the concept should be clear to all.

Citing the example of the 1996 share scam, mayor said the SEC along with the bourses should be alert to prevent such trickery to ensure an investor-friendly environment in the market.

Moreover investors should be provided with maximum information to avoid any confusion about the market, he added.

The DSE Chief Executive Officer (CEO) Salahuddin Ahmed Khan hoped the government bonds would play a significant role to heighten market depth in Bangladesh.

The CEO said, "These bonds will also help the government streamline its debt and fiscal management strategy in a more sophisticated way."

As the present market lacks a good number of good scrips, the bonds will woo investors who look for long-term risk-free instruments, Salahuddin hoped adding the bonds offer guaranteed return on investment.

He also said participation of both institutional and individual investors specially small investors is needed for the success of this new concept.

The DSE will arrange a series of workshops to educate the investors and the bourse members to popularise the bonds.

The primary dealers of the government bonds are Sonali Bank, Janata Bank, Agrani Bank, Prime Bank Limited, Uttara Bank Limited, Southeast Bank Limited, Jamuna Bank Limited, International Leasing and Financial Service Limited and a DSE member National Credit and Commerce Bank Limited (NCCBL).