How much can LankaBangla clients earn from primary treasury bonds?

LankaBangla Securities, on behalf of its brokerage clients, successfully participated in the maiden primary auction of treasury bonds through beneficiary owner (BO) accounts.

The top-tier brokerage firm's treasury trading desk on Tuesday secured up to over 9% yield for its clients at the auction of the two-year government bonds and the value was Tk1.1 crore.

Yield refers to the annual percentage return investors earn against their actual cost of buying an asset.

LankaBangla officials said they let only institutional clients participate in the first-ever bidding through BO accounts. The primary treasury auction services will be offered to all types of investors after a successful test transaction.

The successful bidder client of LankaBangla is set to receive its bond units at the BO account by Thursday.

Besides leading the primary auction services, LankaBangla Securities also has been leading the secondary market services for treasury trading in stock exchanges.

Its special services include the secondary market supply of treasury bonds as it has built an inventory of government securities alongside a deeper tie with existing investors of the outstanding bonds. Even other brokerage firms can ask Lanka Bangla Securities nowadays for any exchange-traded treasury instrument their clients want to buy.

Successful bidding in the treasury auction demands investment prudence as the yield at which investors bid is not a unique rate, instead, they bid within a range.

Everyone eyes a higher yield while too much ambition results in a failed bidding ultimately as the central bank tries to pay less interest against the money the government borrows through the treasury bonds.

Treasury bonds became tradable in stock exchanges last year.