Trading of Beximco Green Sukuk bond worth Tk 3,000 crore on the capital market, the largest of its kind in the country’s history, has started on Thursday.
Salman F Rahman, private industry and investment adviser to the Prime Minister, said, "If you keep money in the bank, you can get 6 percent profit at the end of the year, while Sukuk gives 9 percent. It could grow further."
He made the remarks while addressing at an event as Beximco Green-Sukuk Al Istisna – country's first-ever asset-backed security by a private sector entity – made its trading debut on the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE).
The Beximco Group Vice-Chairman attended the program, held at the DSE Tower in Dhaka, as the chief guest.
Shibli Rubaiyat Ul Islam, Chairman of Bangladesh Securities and Exchange Commission was a special guest while DSE Chairman Yunusur Rahman presided over the function.
Salman F Rahman said when Sukuk was being considered, we had an idea that ordinary investors would respond, he said, adding that but in reality, such bonds did not receive much response in the capital market as they were new.
However, there has been a response from institutional investors, he mentioned.
Ordinary investors in the mountains have also shown interest in Suku, said Beximco Group Vice Chairman.
He said, "When it was thought that the bank interest rate would be 9 percent (taking a loan from a bank) and 6 percent (depositing money in the bank), the traders in the sector feared that it would not help the business."
However, it has been implemented on the instructions of Prime Minister Sheikh Hasina, he said, adding that now it is seen that the bank is doing good business at 9 and 6 interest rates.
Salman F Rahman said Bangladesh's capital market suffers from two major problems – infrastructure and trading trends of institutional and general investors.
Explaining the two issues, he said, "One of the problems is infrastructure related and other is trading trends of institutional and general investors in a mature market."
"Our market is only equity-based. This is a big weakness, and taking this in view the securities regulator is working for the development of the debt market," he added.
He expressed hope on the future financing for the government's large projects through bonds.
Stating that the country's brokerage houses are treated as brokers due to lack of corporate practices, he said, adding that "brokerage houses will have to adopt corporate practices in a bid to become institutes and this will help restore the confidence of investors."
Speaking on the occasion, Salman F Rahman said, "Institutional investors contribute the most in a stable market. The participation of retail investors is low. We have the opposite here. Here the investment of retail investors is more, and the participation of institutional investors is less. As a result, the capital market is rumored.
In June last year, the BSEC approved Tk 3,000 crore ‘Green Sukuk Bond’ for expansion of Beximco Textile Unit and implementation of Beximco’s two government-approved subsidiary renewable power generation projects (Teesta Solar Limited and Karatoya Solar Limited).
This five-year secured convertible or redeemable asset-backed Sukuk is the first green Sukuk approved by the BSEC.
The 3,000-crore Green Sukuk has been earmarked for an IPO of Tk 750 crore. The remaining Tk 2,250 crore was collected through private placement.
