1 / 40

Financial Market Structure in Asia

Financial Market Structure in Asia . 10 May , 2001 By Dr. Sayuri Shirai. Summary Observations. I. The banking sector remains dominant. II. Corporate bond issues are increasing, but markets are largely underdeveloped.

Gabriel
Download Presentation

Financial Market Structure in Asia

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Financial Market Structure in Asia 10 May, 2001 By Dr. Sayuri Shirai

  2. Summary Observations I. The banking sector remains dominant. II. Corporate bond issues are increasing, but markets are largely underdeveloped. III. The banking sector plays a crucial role in the corporate bond market (issuers, investors, guarantors, underwriters…) IV. The underdeveloped corporate bond markets are associated with underdeveloped government bond markets.

  3. Observation IDominance of the Banking Sector A. Outstanding Bank Loans as a Share of GDP • 1990-99 average • 1990-99 time series B. Outstanding Bank Loans as a Share of Total External Finance (Outstanding Bank Loans + Equity Market Capitalization + Outstanding Corporate Bonds) • 1990-99 average • 1990-99 time series

  4. I.A.Share of Outstanding Bank Loans in GDP (1990-1999 average) Source: DRI Asia Database; IFS April 2001.

  5. I.B.Share of Outstanding Bank Loans in Total External Finance (1990-99 average) Source: DRI Asia Database; IFS April 2001.

  6. Observation IIUnderdeveloped Corporate Bond Markets A. Limited Issue Size a. Corporate Bond Issues as a Share of GDP • 1990-99 average • 1990-99 time series b. Corporate Bond Issues as a Share of External Finance • 1990-99 average • 1990-99 time series c. Sources of Financing by Non-Financial Firms for New Investment (flow data)

  7. B. Relatively Short Maturities C. Illiquid Secondary Markets • Buy and hold strategy a. Concentrated investor base b. Deposits dominating households’ financial assets c. Low turnover ratio D. Most of the bonds were guaranteed or privately placed

  8. II.A.aShare of Outstanding Corporate Bonds in GDP (1990-99 average) Source: DRI Asia Database; IFS April 2001, Flow of Funds Accounts of the U.S.

  9. II.A.b.Share of Outstanding Corporate Bonds in Total External Finance (1990-99 average) Source: DRI Asia Database; IFS April 2001, Flow of Funds Accounts of the U.S.

  10. II.A.c. Sources of Financing New Investment by Non-Financing Firms Korea

  11. Malaysia

  12. Thailand

  13. Indonesia

  14. India

  15. Philippines

  16. II.B.Average Maturity of Corporate Bonds Source: APF Country Studies

  17. II.C.aConcentrated Investor Base Korea % of total corporate bonds

  18. Malaysia

  19. Thailand % of total corporate bonds

  20. Indonesia % of total corporate bonds

  21. II.C.b. Households’ Saving Pattern Share of Deposits in Total Financial Assets Source: APF Country Reports

  22. II.C.c. Turnover Ratio of Corporate Bonds Source: APF Country Reports

  23. II.D. Guaranteed Bonds % of total corporate bonds * 80% of the bonds are sold through private placement (non-rated) before the crisis

  24. Observation IIIDominance of the Banking Sector in Corporate Bond Market *The shaded area refers to the case where the banking sector plays a crucial role.

  25. Observation IVUnderdeveloped Government Bond Markets A. Issue Size • 1990-99 average • 1990-99 time series B. Relatively Short or Influenced Maturity C. Illiquid secondary markets a. Concentrated investor base b. Low turnover ratio

  26. IV.A. Share of Outstanding Government Bonds in GDP

  27. IV.B. Average Maturity of Government Bonds

  28. IV.C.a. Concentrated Investor Base Korea

  29. Malaysia

  30. Thailand

  31. Indonesia

  32. IV.C.c. Turnover Ratio of Government Bonds

More Related