ASEAN5 Bond Market Development: Where Does it Stand? Where is it Going?

33 Pages Posted: 22 Jun 2011

See all articles by Joshua Felman

Joshua Felman

International Monetary Fund (IMF)

Simon Gray

International Monetary Fund (IMF)

Mangal Goswami

International Monetary Fund (IMF)

Andreas (Andy) Jobst

International Monetary Fund (IMF) - European Department

Mahmood Pradhan

International Monetary Fund (IMF)

Shanaka J. Peiris

International Monetary Fund (IMF)

Dulani Seneviratne

International Monetary Fund (IMF)

Date Written: June 2011

Abstract

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.

Keywords: Asia, Bond markets, Bonds, Borrowing, Corporate sector, Demand, Indonesia, Investment, Malaysia, Philippines, Singapore, Thailand

Suggested Citation

Felman, Josh and Gray, Simon and Goswami, Mangal and Jobst, Andreas A. and Pradhan, Mahmood and Peiris, Shanaka J. and Seneviratne, Dulani, ASEAN5 Bond Market Development: Where Does it Stand? Where is it Going? (June 2011). IMF Working Papers, Vol. , pp. 1-32, 2011. Available at SSRN: https://ssrn.com/abstract=1869546

Josh Felman

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Simon Gray

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Mangal Goswami (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Andreas A. Jobst

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States
+1-202-538-2898 (Phone)

Mahmood Pradhan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Shanaka J. Peiris

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Dulani Seneviratne

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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