Welcome remarks
Y Bhg Dato’ Sri Zarinah Anwar
Chairman, Securities Commission
at the
ASEAN Infrastructure Financing Mechanism (AIFM) Conference
Kuala Lumpur, 10th November 2008

Yang Amat Berhormat Dato’ Sri Najib Tun Abdul Razak, Deputy Prime Minister and Finance Minister of Malaysia

His Excellency Dr Surin Pitsuwan, Secretary-General of ASEAN

Yang Bhg Tan Sri Wan Abdul Aziz Wan Ibrahim, Secretary General of the Treasury

Members of the Asean Infrastructure Financing Mechanism Task Force

Distinguished guests, ladies and gentlemen

Good morning

1. I am honoured to have been asked to deliver the welcoming remarks at this inaugural Conference organized by the ASEAN Infrastructure Financing Mechanism (AIFM) Task Force. This Task Force was established by the ASEAN Finance Ministers in 2006 and is currently chaired by Malaysia. Today’s event is a significant milestone in terms of signaling the commitment of ASEAN in promoting infrastructure development in the region. We are deeply honoured that our Deputy Prime Minister and Finance Minister Yang Amat Berhormat Dato’ Sri Najib Tun Abdul Razak, the ASEAN Secretary-General His Excellency Dr Surin Pitsuwan and our Minister of Finance II, Yang Berhormat Tan Sri Nor Mohamed Yakcop have graciously agreed to address this conference.

The enthusiasm for this important ASEAN initiative is reflected by the presence of leading policy-makers and global experts at today’s conference. On behalf of the AIFM Task Force, I would like to thank you for your participation and to extend to all foreign participants to this conference, a warm welcome to Malaysia

Strengthening the role of ASEAN’s capital markets in financing infrastructure projects and promoting regional integration

Ladies and Gentlemen,

2. We are extremely excited to be part of these pioneering efforts to develop pro-active and innovative solutions to accelerate infrastructure development in the region. For securities regulators, who are also responsible for the development of our capital markets, we are encouraged by the opportunity that these efforts present to enhance the role of capital markets in intermediating regional savings to finance infrastructure development.
3. ASEAN has the financial resources to grow its capital markets at a quicker pace. The region has a high savings rate of 35% which is nearly double that of NAFTA and one and half times higher than the EU. However, intra-regional foreign direct investment is low. More efficient intermediation of ASEAN’s surplus savings therefore represents an obvious opportunity to promote greater intra-regional investments as well as greater alignment of national regulatory approaches to reduce the cost of operating in the regional market.
4. The ASEAN securities regulators, operating through the ASEAN Capital Markets Forum (ACMF), have developed a deep understanding of the conceptual and practical challenges of bringing our markets together. As regulators, we share a common objective to ensure that our markets are well supervised and regulated to maintain good governance and high levels of investor protection. In addition, we are also cognizant of the need to maintain the balance between the speed of liberalization with the need to provide sufficient time for member countries to build the institutional strength for social and financial stability. Our collaboration at the regulators level as well as progress in facilitating infrastructure players to tap our capital markets can be a catalyst in fast-tracking and accelerating the growth and integration of capital markets in the region.

The regulatory spadework has already begun. Recently, the ASEAN Finance Ministers launched a set of harmonised disclosure standards, known as the ASEAN and Plus Standards. These Standards, developed by ASEAN securities regulators, are intended to facilitate more cost-efficient cross-border offerings of securities and to increase the attractiveness of ASEAN as a combined market for fund-raising. Issuers now need to comply with only one set of common disclosure stansards with limited additional requirements prescribed by individual ASEAN member countries. Work has also been started by the ACMF to streamline offering timelines in ASEAN jurisdictions, as well as to promote the adoption of international accounting standards for the preparation of financial statements in disclosure documents for cross border offerings.

At the moment, ASEAN accounts for only 2.1% of global market capitalization. Its total market cap represents only just about half of ASEAN’s nominal 2008 GDP of USD1.5 trillion. ASEAN also only has 120 public-listed companies with a market capitalization of more than US1 billion as compared with more than 4,100 worldwide. By global standards, our markets and our PLCs are small relative to the size of our economies. This reflects gaps in market-based mechanisms to efficiently intermediate regional savings to support intra-regional economic development.

6. As regulators, we will continue to be vigilant on structural impediments that may constrain the growth and operational efficiency of our markets. We will therefore continue to work on the regulatory dimensions to improve intra-regional access and to facilitate innovation for the introduction of new structures and risk management instruments to mitigate the risk exposures typically associated with large-scale and long-term projects.
7. In this regard, the current global financial market crisis provides timely lessons that investor confidence in the integrity of our capital market as well as the ethical way in which it functions is a pre-requisite to setting a strong foundation for the capital formation process. The region’s capital markets can be positioned to evolve into an important source of financing for infrastructure projects by fostering investor confidence in the reliability of the disclosure on the risk exposure of underlying assets, through the promotion of good governance and risk management, the application of high standards and best practices and in the integrity of our markets.


Ladies and gentlemen,

8. In the light of recent market developments, this conference provides a timely and excellent platform for the public and private sectors to discuss key issues and challenges as well as to provide opportunities for us to strengthen our partnership in regional infrastructure and financing.
9. The participation of regional policy-makers as well as global experts will provide impetus to shaping innovative market-oriented solutions in tandem with appropriate government initiatives to accelerate infrastructure development in the region. Tomorrow the AIFM Task Force will be holding its meeting and the issues and proposals discussed at today’s conference will be valuable input for its deliberations.
10. In conclusion, please allow me once again to express our grateful thanks to Yang Amat Berhormat Dato’ Sri Najib Tun Abdul Razak and His Excellency Dr Surin Pitsuwan for officiating at this function to reflect the high-level commitment towards achieving this ASEAN Finance Ministers’ aspiration. We would also like to thank our joint organizers, the Ministry of Finance Malaysia, the World Bank, the Asian Development Bank, the ASEAN Secretariat, the Asean Capital Markets Forum as well as the corporate sponsors and leading private sector experts for their support and active participation in this conference.

Thank you.