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Trading of City Bank perpetual bond begins this month

FE Report | October 17, 2021 00:00:00

Dhaka bourse is set to open trading of perpetual bond by this month through the direct listing of bond issued by The City Bank.

Talking to the FE, the officials of Bangladesh Securities and Exchange Commission (BSEC) and Dhaka Stock Exchange (DSE) have said the listing of The City Bank's bond is at final stage.

"We asked the DSE in last week to accelerate the listing of perpetual bonds. The DSE will approve the listing of The City Bank's perpetual bond in its next board meeting," said Dr. Shaikh Shamsuddin Ahmed, a BSEC commissioner.

He said the trading of The City Bank's bond will be started at the end of this month.

Perpetual bonds are fixed-income securities with no maturity date and investors receive interest in the form of coupon payments.

The listing of perpetual bonds approved so far will be completed under direct listing method.

As per existing rules, only the state-owned companies are allowed for direct listing.

Offering waiver from existing rules, the securities regulator allowed the direct listing for perpetual bonds issued by private commercial banks.

The BSEC commissioner Mr. Ahmed said their target is to enhance turnover value without looking at the movement of market index.

In its directive issued in May last, the securities regulator included a provision for the subscription of 10 per cent of a perpetual bond through public offer.

Before issuing the directive, the securities regulator approved the proposals of perpetual bonds by 11 banks.

After issuing the directive regarding mandatory listing of perpetual bonds, the securities regulator asked 11 banks to accelerate the listing of their bonds.

Of the banks, the size of the City Bank's bond is Tk 4.0 billion, Mutual Trust Bank Tk 4.0 billion, One Bank Tk 4.0 billion, First Security Islami Bank Tk 6.0 billion, Trust Bank Tk 4.0 billion, Social Islami Bank Tk 5.0 billion, Jamuna Bank Tk 4.0 billion, Shahjalal Islami Bank Tk 5.0 billion, Islami Bank Tk 8.0 billion, EXIM Bank Tk 6.0 billion and Southeast Bank Tk 5.0 billion.

Of these banks, Southeast Bank, Trust Bank, The City Bank and Mutual Trust Bank have completed the subscription of their perpetual bonds, according to BSEC officials.

Asked, a senior official of the premier bourse DSE said only The City Bank has applied for listing of its perpetual bond.

"There is no obstacle for listing of perpetual bonds. The listing of the bond of The City Bank is likely to be approved in this week. We hope the trading of this bond will be opened in next week," said the DSE official.

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