TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Asia should strengthen economies, financial systems: ADB
Emerging East Asian countries should use the window of opportunity opened by the delay in US monetary policy normalization to strengthen their economies and financial systems, the latest quarterly Asia Bond Monitor from the Asian Development Bank (ADB) urges
Change Size
E
merging East Asian countries should use the window of opportunity opened by the delay in US monetary policy normalization to strengthen their economies and financial systems, the latest quarterly Asia Bond Monitor from the Asian Development Bank (ADB) urges.
'A delay in US bond tapering gives the region a bit of extra time to make sure its economies and financial systems are resilient enough to face the likely market volatility ahead,' head of ADB's office of regional economic integration Iwan J. Azis said in an official release.
Emerging East Asia remains vulnerable to a shift in investor sentiment when the US eventually scales back its asset purchase program and as it tackles still-unresolved questions over its government debt ceiling, the report warns.
Volatile capital flows make it tougher for policymakers to manage their economies while looming tighter liquidity could push down asset prices, particularly in the property sector, undermining the health of financial firms with large holdings.
Despite the market uncertainty, emerging East Asia's local currency bond markets expanded 2.4 percent quarter-on-quarter with US$7.1 trillion in bonds outstanding at the end of September.
The growth was led by Indonesia, up 3.9 percent, the Philippines, up 3.6 percent, and China, up 3.0 percent. The emerging East Asian bond market was 12.5 percent bigger than a year earlier.
The region's government bond markets grew 2.1 percent to $4.4 trillion, up from the quarterly growth of 1.1 percent in the April through June quarter. The corporate market increased 2.9 percent to $2.7 trillion, slower than the 8.0 percent expansion in the previous three months.
At the end of September, the outstanding stock of Thai baht-denominated bonds stood at 8.9 trillion baht ($285 billion), 0.2 percent more than at the end of June and 8.8 percent more than at the end of September 2012. Gross issuance fell to $63 billion in the third quarter from $79 billion in the second quarter.
Market returns have improved somewhat in recent months. Year-to-date returns on the Pan-Asian Index for local currency bonds were still down 1.6 percent on a US dollar unhedged total return basis as of 18 October, but that was an improvement on the 3.5 percent loss as of 31 July.
Emerging East Asia comprises China, Hong Kong, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
