New BB move to activate secondary bond market

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FE Report
The Bangladesh Bank (BB) has gradually activating its newly opened window to invigorate trading of government bonds in the country's secondary bond market.
The central bank purchased government bonds worth Tk 50 million through its new window Wednesday from the National Credit and Commerce Bank Limited (NCCBL), official sources said.
"We are trading bonds through our new window to activate secondary bond market," a BB senior official told the FE Wednesday, adding that the central bank has also planned to trade treasury bills through the window in the near future.
Last November, the central bank opened the new window for trading only government bonds aiming to encourage primary dealers (PDs) to trade and bring dynamism in the secondary bond market.
Earlier, the BB selected nine PDs -- eight banks and a NBFI -- to trade on government-approved securities in the secondary bond market and issued guidelines for them.
The BB has already amended the guidelines for PDs allowing commission and providing liquidity support to activate the secondary bond market.
Under the amended guidelines, the bank and non-bank PDs will underwrite a minimum of 12 per cent and 4.0 per cent respectively of the auction amounts for the fiscal year 2007-08 until further notice.
Currently, four government bonds -- 5-year, 10-year, 15-year and 20-year -are being traded in the market.