Asian bond market integration urged (By IFN)

GLOBAL: With global Sukuk sales poised to lock in another record-breaking year this year, industry players are now calling for measures to help further develop the flourishing market.
In Asia, Ranjit Ajit Singh, the chairman of Securities Commission Malaysia, has urged for further efforts in developing the regional fixed income market; highlighting moves such as the establishment of the Asian Bond Fund, the set-up of the Asian Bond Market Initiative; aimed at developing more accessible and well-functioning bond markets within the ASEAN+3 (China, Japan and South Korea) region.

However, he said that the outcomes of the regional initiatives have not reflected the need for such measures, noting that: “It is time for policymakers, regulators and leading private sector players, who have made in-roads in creating a regional presence, to take an acute and concerted assessment on the key measures needed to fulfill the vision of having a vibrant and sustainable Asian bond market.”

Data from HSBC shows that new Asian bond issuances amounted to around US$56 billion as at the end of May this year. According to Ranjit, east Asia’s local currency bond markets grew to US$5.7 trillion from US$948 billion between 2001-2011, in contrast to a 150% increase in foreign currency issuances in the region to US$603 billion during the same period.

He also stressed on Malaysia’s role in developing the region’s bond market, due in part to its strong Sukuk market, which makes up for 63% of total corporate bonds outstanding. Nonetheless, he noted that the country must continue to scale up its market for Islamic products, “using our expertise to further expand offshore and work with both regional partners and the private sector, to create a bigger and more integrated Sukuk market.”

The development of a regional bond market should also be bolstered by widening the issuer base and instilling investor awareness on bond market products, risks and rewards.

“Underpinning the development of an Asian bond market is a framework that facilitates cross-border bond transactions. In this regard, there needs to be a greater push among policymakers and regulators to increase efforts in creating a facilitative framework that includes more harmonized rules and regulations, standardized bond offering documents, as well as a set of common disclosure standards for bond issuances,” he said.

See: http://redmoney.newsweaver.co.uk/1rcrt6nc105h38rwoni3wx?email=true&a=6&p=25811654&t=21640154