ASEAN‐5 Bond Market Development: Where Does it Stand? Where is it Going?

16 Pages Posted: 29 Apr 2014

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 Peiris

International Monetary Fund (IMF) - African Department

Dulani Seneviratne

International Monetary Fund (IMF)

Date Written: May 2014

Abstract

Since the late 1990s' Asian crisis, ASEAN‐5 countries have expended considerable effort in developing their bond markets. However, the size of these markets relative to GDP has hardly changed. Can we explain this? And does it mean that domestic markets have not, in fact, developed? The article argues that bond market growth has been held back by a sharp fall in business investment, 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 ASEAN‐5 bonds. These developments have important ramifications. With the investor base growing and infrastructure investment likely to rise, ASEAN‐5 bond markets could expand rapidly, holding out the prospect that the region could finally achieve ‘twin engine’ financial systems in the near future.

Suggested Citation

Felman, Josh and Gray, Simon and Goswami, Mangal and Jobst, Andreas A. and Pradhan, Mahmood and Peiris, Shanaka and Seneviratne, Dulani, ASEAN‐5 Bond Market Development: Where Does it Stand? Where is it Going? (May 2014). Asian‐Pacific Economic Literature, Vol. 28, Issue 1, pp. 60-75, 2014. Available at SSRN: https://ssrn.com/abstract=2430512 or http://dx.doi.org/10.1111/apel.12051

Josh Felman (Contact Author)

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

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 Peiris

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

1700 19th Street, NW
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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