Asian bond markets have evolved during the last 10 years, but they still remain a small part of the total financial assets with a large variation among the countries.
This was stated by former SBP Governor and National Commission on Government Reforms Chairman Dr Ishrat Hussain, in his keynote address, at the 10th general meeting of the Asia Pacific Central Securities Depository Group (ACG) at a local hotel on Thursday. Dr Ishrat Hussain said that a key constraint is the lack of liquidity, which affects efficiency and the overall role these markets are able to play.
To enhance liquidity in the bond markets, non-bank financial institutions can play a critical role by mobilising and channelling long-term resources through bond markets and meet the growing financing requirements particularly for infrastructure projects in the region.
He dwelt in detail on the situation of the bond markets in the East Asian region, saying the recent initiatives at the regional level and the favourable macro-economic and micro-structural factors should provide a boost to development of bond markets in the coming years. But this can be possible if measures are taken to ensure regular systematic issuance, effective primary dealer system, appropriate hedging and liquidity enhancement facilities, greater price transparency ad access to market information by different groups of investors and effective regulation, monitoring and surveillance of the market.
Integration of bond markets across national boundaries, permitting issuance of unsecured bonds, liberalising market eligibility standards, strengthening trading platforms, clearing and settlement system and establishing regional rating agencies and benchmark yield curves would reinforce regional initiatives taken, he added.
Securities and Exchange Commission of Pakistan (SECP) Chairman Razi-ur-Rehman gave an overview of the capital markets and the comments for the securities depositories from the regulators points of view.
CDC Chief Executive Hanif Jakhura, in his opening remarks, said that Pakistan's economic outlook has seen a complete turnaround in last few years with average GDP growth of 7 percent in the last three years and expected GDP growth of 6 percent to 7 percent in the foreseeable future. Pakistan has positioned itself as one of the fastest growing economy of the region providing excellent opportunities to business and industry to kick-start their business ventures and take benefit of booming Pakistani economy, he added.
He said the dynamism in industry, services and agriculture sectors and the emergence of a new investment climate depicts all the pre-requisites for sustained economic growth. He also briefed the participants on the agenda of the 10th general meeting and the history and activities of the Asia Pacific CSD Group.
CDC Chairman Basheer Janmohammad, in his welcome speech, gave an overview of the economic situation in Pakistan and performance of its bond and capital markets. He briefed the participants on the role of the CDC and welcomed all delegates at the event.
The inaugural session also included a panel discussion on the highly relevant theme of corporate governance for CSDs which was participated by Masato Miyachi, senior adviser of the Asian Development Bank (ADB), Joel Merere, executive director, EuroClear SA/NV France; Derrick Fung, vice-president of the Hong Kong Securities Clearing Company; and Eui Dong Chung, chairman and CEO of the Korea Securities Depository.
The discussion was moderated by Toshitsugu Shimuzi, senior officer of the Tokyo Stock Exchange, Japan. The 10th general meeting of the Asia Pacific Central Securities Depository Group opened here on Wednesday.
Around 60 delegates from 13 countries across the Asia Pacific region, including China, Japan, India, Pakistan, Singapore, Malaysia, Thailand, Hong Kong, Taiwan, Maldives, Bangladesh, Korea, and Indonesia have arrived in Karachi for this three-day event.
Special representatives from the Asian Development Bank and EuroClear SA/NV France are also be participating at the meeting. This year the ACG secretariat is based in Pakistan and the 10th general meeting is being hosted by the Central Depository Company of Pakistan.
The inaugural session of the ACG general meeting was attended by the top corporate executives, government representatives, investors and stock market regulators and international delegates. The general meeting will continue with deliberations of various task forces of the ACG and other sessions till November 10.