United News of Bangladesh

The auction for the 6th government investment Sukuk (Islamic bond) of Bangladesh was held at the Debt Management Department of Bangladesh Bank’s Head Office on Monday. This Sukuk has been issued to fund the "Widening and Strengthening of Important Upazila and Union Roads in Rajshahi Division Project" and is a seven-year Ijara Sukuk (lease-based Islamic bond) with an annual rental yield of 10.50 percent. The total issue size was Tk 2,000 crore. Investors submitted bids totaling Tk 8,347.609 crore, more than 4.17 times the announced amount, resulting in allocating to investors on a pro-rata basis. This marks the sixth Sukuk issuance by the government. Over the past few years, the government has raised a total of Tk 22,000 crore through five earlier Sukuk issues. These instruments allow the government to tap into Shariah-compliant liquidity held by Islamic banks and financial institutions for development projects. Bangladesh Bank to issue Tk 3,000 crore ‘Sukuk’ bond The Sukuk programme has not only offered an Islamic investment alternative to institutions, but also opened up Shariah-compliant investment opportunities for individual investors in a Muslim-majority country like Bangladesh. Banks and financial institutions can use their acquired Sukuk as Statutory Liquidity Ratio (SLR) instruments. Moreover, Islamic banks and Islamic windows of conventional banks may use them as collateral to obtain Islamic Liquidity Support (ILS) from Bangladesh Bank. Although the primary auction was limited to Islamic banks or financial institutions, Islamic branches or windows of conventional banks, individuals, and provident funds, these Sukuk will be tradable in the secondary market, making them accessible to all scheduled banks, financial institutions, insurance companies, individuals, and other institutional investors. Unprecedented Retail Participation Notably, the sixth Sukuk saw unprecedented participation from individual and provident fund investors, with 139 successful applications totaling around Tk 350 crore, accounting for 17.50 percent of the issued amount. By comparison, the total participation from this category in all previous five Sukuk issues was only Tk 307.28 crore across 77 applications, representing just 1.40 percent of the total Tk 22,000 crore issued earlier. BSEC forms committee to probe into Beximco’s sukuk bonds Meanwhile, Islamic branches or windows of conventional banks submitted bids nearly 18 times their allocated quota, indicating a strong appetite for Shariah-compliant investments. This sixth Sovereign Sukuk issuance is expected to play a positive role in improving the socio-economic conditions of the project areas in Rajshahi Division.

The market capitalisation of the Dhaka Stock Exchange (DSE) increased by Tk4.47 lakh crore in the outgoing year 2022, as the 250 treasury bonds started trading in the DSE. Although the index and the share price of most of the companies fell, the market value of 250 treasury bonds and Islamic Sukuk bonds started trading in the capital market for the first time in the DSE. DSE data shows DSE started trading in 2022 with a market capitalization of Tk 3.14 lakh crore. Then on October 10, 2022, 250 government securities were listed on DSE. The market cap stood around Tk7.73 lakh crore. The market cap slightly decreased to Tk7.61 lakh crore at the end of the year. Read more: Shakib’s company involved in share manipulation, DSE investigation finds Among the transaction, the trade volume of the block market was Tk14253.19 crore, which is 6.4 percent of the total transaction. This ratio was 3.97 percent of the total transaction in the previous year. The transactions in the block market have increased compared to the previous year (2021). The investors in the capital market passed another year, along with frustration and uncertainty in the capital market due to the global recession, which erupted from the Covid-19 pandemic and the Ukraine-Russia war. Chairman of the Bangladesh Securities and Exchange Commission (BSEC) Professor Shibli Rubayat –Ul-Islam told UNB that the regulator is working to improve the market situation through diversified products. Read more: DSE share trading between 10am and 2:30pm from tomorrow “But the global situation, which is beyond our control, has created uncertainty in several sectors including capital market,” he said.