YBhg Datin Zarinah Anwar
Acting Chairman / Deputy Chief Executive
KL International Bond Conference
“Accelerating Bond Markets Development In Asia:
Challenges and Opportunities”
29 March 2004
Securities Commission Malaysia
Bismillahi Rahmanir Rahim
Assalamualaikum warahmatullahi wabarakatuh
Yang Berhormat Tan Sri Nor Mohamed Yakcop, Second Minister of Finance , Malaysia
Yang Amat Berbahagia Tun Mohamed Dzaiddin Hj Abdullah, Chairman of Kuala Lumpur Stock Exchange Berhad
Ladies and Gentlemen,
It is with great pleasure that I welcome you to the Securities Commission and to the Kuala Lumpur International Bond Conference, themed “Accelerating Bond Markets Development in Asia: Challenges and Opportunities”.
While Asian economies have registered a remarkable recovery from the financial crisis of 97/98, there is a need to consolidate this accomplishment in order to achieve sustainable economic development. It is essential therefore that the region strengthens its foundations, and facilitates private sector led economic growth supported by productivity enhancement that is fuelled by private investment.
For this to happen, it is vital that Asia’s growing private sector be provided with stable supplies of long term capital, a lesson learned from the crisis when Asian companies were trapped in currency and financing maturity mismatches. A factor that contributed to the severity of the crisis was the relatively underdeveloped bond markets in Asia. A key priority in the development of the capital markets across Asia therefore is the establishment of a deeper, broader and more efficient bond market that provides a competitive source of financing across a wide range of tenors. It is especially pressing to deepen the market at the longer end of the maturity spectrum to ensure that long term funding needs can be met.
There are many challenges that need to be addressed before the region’s bond markets can be said to be fully developed. The small size of the markets have an adverse impact on liquidity and this seriously hampers the active participation of issuers and investors. There is a need therefore to add greater depth to the market by encouraging a wide variety of corporations to participate as issuers and facilitating the creation of investment products that meet the needs of investors. Participation of investors – institutional, individual and foreign – need to be enhanced. Where appropriate, legislation and other restrictions that hamper activities of market participants need to be reviewed. Adequate provisions for information disclosure, accounting standards, rating organizations, and other market infrastructure are pre-requisites, in addition to a fully functioning government bond market that provides an effective benchmark yield curve for pricing.
The challenges are many. Today’s conference is a reflection of the region’s determined and proactive efforts in addressing them. Our conference brings together key stakeholders and experts who will examine the critical issues, provide insights on the way forward and participate in a partnership effort towards the achievement of our objectives.
On behalf of the Securities Commission, I would like to thank all present for having taken time off your busy schedules to be here today. I must also put on record our gratitude to our distinguished speakers whose expertise and experiences will no doubt stimulate valuable engagement on the issues at hand.
Finally I would like to express our utmost appreciation to the Honourable Second Minister of Finance , Yang Berhormat Tan Sri Nor Mohamed Yackop for so graciously agreeing to deliver the keynote address for this conference. Tan Sri, we are indeed honored by your presence this morning.
Ladies and gentlemen, I thank you.