Asean Bond Market Development: Where Does it Stand? Where is it Going?

By Mahmood Pradhan, Shanaka J Peiris, Mangal Goswami, Dulani Seneviratne, Joshua Felman, Andreas Jobst, Simon T Gray

June 1, 2011

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Mahmood Pradhan, Shanaka J Peiris, Mangal Goswami, Dulani Seneviratne, Joshua Felman, Andreas Jobst, and Simon T Gray. Asean Bond Market Development: Where Does it Stand? Where is it Going?, (USA: International Monetary Fund, 2011) accessed November 12, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Since the Asian crisis, ASEAN5 countries have expended considerable effort in trying to develop their domestic bond markets. Yet today these markets are not much larger, relative to GDP, than they were a decade before. How can we explain this? And does this mean that domestic markets have not, in fact, developed? The paper argues that bond market growth has been held back by a sharp fall in investment rates, which has left firms with little need for bond borrowing. Even so, markets have developed in other ways, to such an extent that substantial amounts of foreign portfolio investment have begun to flow into ASEAN5 bonds. These developments have important ramifications. With the investor base growing and infrastructure investment likely to rise, ASEAN5 bond markets could expand rapidly over the next decade, holding out the prospect that the region could finally achieve "twin engine" financial systems.

Subject: Bonds, Corporate bonds, Emerging and frontier financial markets, Financial institutions, Financial markets, Securities markets, Sovereign bonds

Keywords: ASEAN, ASEAN5 GDP, Asia and Pacific, Bond, Bond flow, Bond investor, Bond market, Bond markets, Bond maturity, Bonds, Carry trade, Corporate bond bond market, Corporate bonds, Currency bond, Debt index, Emerging and frontier financial markets, Emerging market, Fixed income, Global, Investor, Investor base, Market development, Securities markets, Singapore dollar, Singapore dollar debt market, Sovereign bonds, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/137
Stock No:

WPIEA2011137
ISBN:

9781455265428
ISSN:

1018-5941

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