#Liquidity101 Buying or selling bonds in the secondary market

Let's look at the recently offered infrastructure bond Issue No IFB1-2023-6.5

Buying from Central Bank or what we refer as primary market prices on 13th Nov- New issue ata average rate, price was Kshs 100(per Kshs 100)

28 days later, the same bond in primary market through a tap sale, price is Kshs 101.3298(per Kshs 100) adjusted for accrued interest.

28 days later, the same bond in the secondary market, sold to you by financial institutions, price is Kshs Kshs 105.636(per Kshs 100) the extra amount as a result of accrued interest, premium asked by the seller.

NB: The right pricing can be provided by your investment broker, the price could be higher after fees.

Bonds worth 12.9 billion traded in the market last week signifying the importance of the secondary market.

It offers liquidity, offering investors an opportunity to exit their investments before maturity.

Is it easy to sell a bond in the secondary market?

For retail investors its not easy to trade a bond in secondary market, in most cases, this has to do with broker support. The level of support by brokers and investment banks can influence the ease of selling your bond.

We look forward to see how DhowCSD makes it easy to transact bonds in secondary market.