Академический Документы
Профессиональный Документы
Культура Документы
1
Basis for Role of Bank Negara Malaysia in
developing the Malaysian Government Bond
Market
2
Developing Domestic Government Bond Market
¾Overview of Government Bond Market development stages
¾Where are we now ?
¾What constitutes a successful Government Bond Market
¾Enhancing the depth & breadth of the bond market
¾Types of instruments
¾Current and future initiatives
¾Regional Initiatives
¾Lesson Learnt
3
Overview of Malaysian Government Bond Market
Development Stages
1960s to 1980s 1990s
2000 >>
1959 – 1980 Opening Up : Post-crisis
Market efficiency :
Exclusive Market Pre-crisis Development
Depth and breadth
development stage stage
5
Where are we now…
Government Bond market size relative to GDP Historical Government Bond Market size
relative to GDP
(%) USD (bil) (%)
60 100 50%
Dec 2000 June 2009
Government % GDP
50
80 40%
40
60 30%
30
40 20%
20
10 20 10%
0 0 0%
CN HK ID KR MY PH SG TH VN
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
0
CN HK ID KR MY PH SG TH VN
6
Malaysian Government Bond Market as percentage of GDP
has evolved to become largest in the ASEAN region
Size of Government Bond Market
(% of GDP) 2009
Singapore
(46.4%)
Significant increase in size over GDP:
Hong Kong
(17.6%)
Thailand (48%) • 2000 – USD 37.1 bil (39.6% of GDP)
Indonesia
(14.9%) • 2009 – USD 96.5 bil (49.0% of GDP)
Philippines
Malaysia (49%) (32.6%)
Vietnam
12.9%
Korea (51.6%)
China (43.6%)
8
What constitutes a successful Government Bond Market…
• Standard • Minimum bid
international requirement to
conventions ensure 100%
(ie: price Widely subscription for
calculation, Successful
practiced government
act/act) Principal issuances
global
Dealership
conventions
• Standard forms • Principal dealers as
of instruments market makers to
(ie: cashflows, Successful
Successful provide two way
coupons etc) Government
Government prices
Bond
Bond Market
Market • Liberalised
restrictions imposed
• Pension Fund on non-residents to
minimum Wide invest in MGS/GII
Mandatory
investment investor
Statutory • Withholding tax
requirements base
Requirements exemption for non-
• Bank’s liquid Conducive resident
asset regulatory
requirements • Allow international
framework clearability via global
• Insurance custodian institutions
companies • Easily accessible financial
minimum assets • Inclusion of MGS
market guidelines & code of into Citigroup’s
requirements conduct WGBI to attract
• Efficient infrastructure investors
9
Developing Domestic Government Bond Market
¾Overview of Government Bond Market development stages
¾Where are we now ?
¾What constitutes a successful Government Bond Market
¾Enhancing the depth & breadth of the bond market
¾Types of instruments
¾Current and future initiatives
¾Regional Initiatives
¾Lesson Learnt
10
Efforts focused on enhancing the depth and breadth of the
bond market
Efficient
benchmark
yield curve
11
Developing an efficient benchmark yield curve…
12
Developed Fully Automated System for Issuing/Tendering
(FAST) website for efficient issuance process…
• FAST was developed in 1996 as a
centralised issuing platform for all
competitively auctioned ringgit bonds
Objectives :
• To improve overall efficiency of the
tendering procedures
• To reduce errors and delays arising from
manual handling of tenders
• To promote standardisation in bidding and
processing of tenders
www.fast.bnm.gov.my • To ensure the integrity and confidentiality
of bidding and tender information.
13
Efforts to widen issuer and investor base…
14
Improving secondary market liquidity…
Interbank
Institutions
15
Development of risk management instruments…
• Allowed market players to hedge adverse interest rate movements
Interest Rate Swap using IRS
• Fixing at 11 am on every business day on Reuters and Bloomberg
page for transparency
16
Developing Domestic Government Bond Market
¾Overview of Government Bond Market development stages
¾Where are we now ?
¾What constitutes a successful Government Bond Market
¾Enhancing the depth & breadth of the bond market
¾Types of instruments
¾Current and future initiatives
¾Regional Initiatives
¾Lesson Learnt
17
Types of instruments available
Malaysian Government Government Investment Issues
Securities (MGS) (GII)
18
Developing Domestic Government Bond Market
¾Overview of Government Bond Market development stages
¾Where are we now ?
¾What constitutes a successful Government Bond Market
¾Enhancing the depth & breadth of the bond market
¾Types of instruments
¾Current and future initiatives
¾Regional Initiatives
¾Lesson Learnt
19
Current and future initiatives…
20
Developing Domestic Government Bond Market
¾Overview of Government Bond Market development stages
¾Where are we now ?
¾What constitutes a successful Government Bond Market
¾Enhancing the depth & breadth of the bond market
¾Types of instruments
¾Current and future initiatives
¾Regional Initiatives
¾Lesson Learnt
21
Malaysia also supportive of regional initiatives to broaden
and deepen domestic and regional bond markets
• Participation in Asian Bond Fund (ABF) Initiative under auspices of EMEAP group of central
banks
• ABF1 launched in 2003 aimed at channeling portion of official reserves in EMEAP countries
into region
• Mechanism to diversify investments
• Enhance returns
• ABF2 launched in 2005 to promote domestic currency bond markets
• New asset class of bonds with multi-currencies in a basket
• ABF Malaysia Bond Index Fund sub-fund under ABF2 has been listed on Bursa
Malaysia
• Greater recognition from foreign investors
• Foreign investor holdings in government bonds market account for 7.60% of total
outstanding bonds (2001: 0.3%)
• Inclusion in major bond indices eg. JP Morgan, World Government Bond Index
22
Developing Domestic Government Bond Market
¾Overview of Government Bond Market development stages
¾Where are we now ?
¾What constitutes a successful Government Bond Market
¾Enhancing the depth & breadth of the bond market
¾Types of instruments
¾Current and future initiatives
¾Regional Initiatives
¾Lesson Learnt
23
Lessons learnt…
• Conduct regular meetings with market participants on issues related to the development of the
domestic bond market
• A successful Principal Dealer system is key to ensure efficiency of the bond market
24
For more information on the Malaysian bond market…
25
Thank You
26