Bond is a contractual agreement between lender (investor) and borrower (issuer). The issuer is obligated to pay the lenders/investors periodic coupon payments until the stated maturity. Thus, bond investor has the claim of the future cash flows from holding the bond. |
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The information regarding the periodic interest rates, frequency of the coupon payments, term to maturity, par value of the bond, redemption value of the bond and any other provisions are all stated in the prospectus when a bond is issued. Once a bond is auctioned off the primary market, the bond can be electronically traded in the secondary market, Bond Electronic Exchange (BEX). There are several names associated with bond, such as debt instrument, fixed income instrument, debenture, etc.
Investors can buy/sell bond in Bond Electronic Exchange (BEX), which has been
officially launched on November 26th, 2003.
BEX's primary goal is to develop all facets of the Thai bond market to reach an international standard, on par with other mature bond markets in the rest of the world. In addition, the institution of an electronic trading platform like BEX is a step of progress towards creating a vibrant Asian Bond Market, whose development and progress would contribute to the stabilization of the regional economy.
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