SC Hosts Colloqium to Promote Development of Malaysian Corporate Bond Market

Kuala Lumpur, 3 February 2000

The Securities Commission (SC) today hosted a Colloquium on the Malaysian Corporate Bond Market. The event was organised by the National Bond Market Committee (NBMC), of which the SC is a member.

The colloquium was organised to bring together members of the NBMC, market intermediaries, issuers and institutional investors to discuss issues pertaining to the development of the Malaysian corporate bond market. This is in line with the NBMC's vision to establish an efficient, viable and liquid corporate bond market in Malaysia.

Among the main issues discussed at the colloquium was the development of a benchmark yield curve that would provide an effective basis for a potential investor to assess the attractiveness of securities being offered. In this regard, the experiences of other developing countries in establishing a benchmark yield curve were cited to highlight critical success factors.

Colloquium participants examined the subject of liquidity of the secondary market and risk management. The focus of discussions on this area was on, among others, current impediments and measures that were needed to enhance liquidity in the secondary market for debt securities. The exposure of Malaysian's current bond market to liquidity, maturity and currency mismatch risks as well as the need for appropriate risk management plans were also deliberated over.

The current bond issuance process was also studied to determine current shortcomings and identify structural changes to the regulatory framework that would be required to streamline the issuance process. At the same time, measures to widen the issuers base were also considered.

Another major issue that was addressed was the need to broaden the investor base. In this respect, colloquium participants analysed the existing problems faced by domestic investors in terms on investing in Malaysian debt securities.

The event was opened by the Chairman of the NBMC, Dato' Othman Mohd Rijal who is also the Secretary General of the Ministry of Finance. Key members of the NBMC who attended the colloquium include those from the Ministry of Finance, Bank Negara Malaysia, SC, Economic Planning Unit, Registrar of Companies and the Kuala Lumpur Stock Exchange. Speakers at the colloquium comprised major industry participants.


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