Dhaka, Bangladesh (BBN) – The primary dealers (PDs) are going to introduce a uniform pricing method for inter-bank secondary trading of government securities aiming to bring dynamism in the market.
A five-member technical committee, headed by Deputy General Manager of the Agrani Bank Limited Bhanu Roy Chowdhury, of the Primary Dealers Bangladesh Limited (PDBL) is now working to develop such a uniform calculation system, the PDBL said.
Currently, commercial banks and financial institutions are maintaining different timeframe like a year with 360 days or 365 days for calculation of the government-approved securities in the secondary trading.
“We’re now working to develop a uniform calculation method to activate the country’s secondary securities market,” a PDBL senior member told BBN in Dhaka.
He also said deals often fall through in the last stage as different method of calculation is used by the PDs particularly for bonds.
Currently, four government bonds of – 5-year, 10-year, 15-year and 20-year duration – are being traded in the markets.
The central bank earlier selected nine PDs – eight commercial banks and a non-banking financial institution (NBFI) – to handle government-approved securities in the secondary market.
The PDBLhas already decided at a meeting to introduce a uniform pricing method for trading of government securities in the secondary market.
The apex forum of the PDs also decided to form a common market team to attract prospective buyers for investment in such securities.
The secondary market has developed gradually but it is still hovering among banks, non-banking financial institutions and insurance companies, the PDBL member observed.
A total of BDT 70 billion was traded in the secondary market during the first quarter of the current fiscal against BDT 15 billion of the corresponding period of the previous fiscal, according to the PDBL statistics.
BBN/SI/SSR/AD-07November08-11:15 AM (BST)