South Asian Bond Markets

Developing Long-Term Finance for Growth

Kiatchai Sophastienphong, Yibin Mu, Carlotta Saporito

• Publisher: World Bank Publications
• Year: 2008
• eBook ISBN: 9780821376027
• Edition: 0
• Topic: Business
• Subtopic: Finance
• Index: Business

The financial sectors in South Asia Region (SAR) are dominated by commercial banks, which account for the vast majority of the financial system's assets. The domestic debt markets including the government bond and corporate bond markets are at an early stage of development and there are few institutional investors. In recent years, countries in SAR have attempted to develop local debt markets, although the pace of development remains uneven and slow due to many regulatory and institutional impediments. With the notable exception of India, governments in SAR have yet to implement measures required for the proper development of the domestic bond markets. The book will provide a comprehensive overview of the major bond markets in SAR (Bangladesh, India, Nepal, Pakistan and Sri Lanka) highlighting the areas which need further reforms. It is hoped that the book will contribute to our knowledge of bond markets in South Asian countries and create a broad based ownership of the recommendations made by the authors.

Table of contents

• Contents
• Foreword
• About the Authors
• Acknowledgments
• Acronyms and Abbreviations
• Executive Summary
• Chapter 1. Regional Overview
• Chapter 2. Bangladesh
• Chapter 3. India
• Chapter 4. Nepal
• Chapter 5. Pakistan
• Chapter 6. Sri Lanka
• Box 1.1 How Malaysia Enhanced Liquidity in Its Domestic Bond Market
• Box 2.1 Islamic Bonds Offering a New Alternative for Issuers and Investors
• Box 2.2 A Pioneering Securitization of Microcredit Receivables in Bangladesh
• Box 3.1 A New Instrument for India’s Money Market
• Box 4.1 Chronology of Bond Market Development in Nepal
• Box 6.1 Chronology of Bond Market Development in Sri Lanka
• Figure 2.1 Trends in Selected Interest Rates, Bangladesh, March 2006–December 2007
• Figure 2.2 Weighted Average Yield of Treasury Bills Based on Auction of December 30, 2007, Bangladesh
• Figure 2.3 Components of Bank Capital, Bangladesh
• Figure 3.1 Market Borrowing by Central Government, India, Selected Fiscal Years, 1991–2007
• Figure 3.2 Yield-to-Maturity Curve in Government Bond Market, India, November 13 and 14, 2007
• Figure 3.3 Securitization Transactions, India, Fiscal 2003–07
• Figure 4.1 Distribution of Holdings of Government Bonds and Treasury Bills, Nepal, 2002–06
• Figure 5.1 Issuance of Pakistan Investment Bonds, Fiscal 2001–07
• Figure 5.2 Structure of Domestic Government Debt, Pakistan, Fiscal 2002–06
• Figure A5.1 Government Debt, Pakistan, Selected Fiscal Years, 2002–07
• Figure 6.1 Maturity Structure of Treasury Bonds and Rupee Loans, Sri Lanka
• Figure 6.2 Yield-to-Maturity Curves for Government Debt Securities, Sri Lanka, Selected Dates, December 2005–June 2007
• Table 1.1 GDP Growth, Selected South Asian and East Asian Economies, 2002–07
• Table 1.2 Selected Macroeconomic Indicators, Selected South Asian Countries, 2002–06
• Table 1.3 Financial Market Profile, Selected Economies, 2006
• Table 1.4 Domestic Debt Securities Markets, Selected South Asian Countries, 2002–06
• Table 1.5 Domestic Debt Securities Markets as a Percentage of GDP, Selected South Asian Countries, 2002–06
• Table 1.6 Cost of Bond Issuance, Selected South Asian Countries, 2007
• Table 2.1 Structure of Financial System, Bangladesh, 2004–06
• Table 2.2 Selected Interest Rates, Bangladesh, September 2005–June 2007
• Table 2.3 Composition of Domestic Government Debt, Bangladesh, Fiscal 2000–07
• Table 2.4 Results of Treasury Bill Auctions, Bangladesh, Week Ending December 30, 2007
• Table 2.5 Pattern of New Domestic Government Borrowing, Bangladesh, Fiscal 2004–07
• Table 2.6 Interest Rate on Savings Products by Source and Maturity, Bangladesh, June 2007
• Table 2.7 Cost of Bond Issuance, Bangladesh, 2007
• Table 2.8 Government-Sponsored Infrastructure Investment Projects in the Pipeline, Bangladesh
• Table 2.9 Holdings of Treasury Bills and Bonds by Investor Category, Bangladesh, 2002–06
• Table 2.10 Securitization Transactions, Bangladesh, 2004–07
• Table 2.11 Regulators of the Capital Market and Market Participants, Bangladesh
• Table 3.1 Financial Market Profile, India, 2002–September 2007
• Table 3.2 Net Institutional Investments in Equity and Debt Securities, India, Fiscal 2002–07
• Table 3.3 Composition of Domestic Debt Securities Market, India, 2002–06
• Table 3.4 Consolidated Liabilities of Central and State Governments, India, Selected Fiscal Years, 1991–2007
• Table 3.5 Participants and Products in Debt Securities Market, India
• Table 3.6 Resource Mobilization by Mutual Funds, India, Fiscal 2006–07
• Table 3.7 Liquidity in Government Debt Securities Market, India, Fiscal 2003–08
• Table 3.8 Costs of Bond Issuance through Private Placement, India, 2006
• Table 3.9 Resources Mobilized through Public and Private Placement, India, Fiscal 2005–07
• Table 3.10 Outstanding Issues of Corporate Bonds, India, August 25, 2005
• Table 3.11 Disparities in Treatment of Bonds and Loans in Bank Regulations, India
• Table A3.1 Profile of Central Government Market Loans, India, Fiscal 1998–2008
• Table 4.1 Financial Institutions by Type, Nepal, Selected Years, 1990–2007
• Table 4.2 Financial Market Profile, Nepal, 2002–07
• Table 4.3 Open Market Operations by Nepal Rastra Bank, Fiscal 2005–06
• Table 4.4 Interbank Transactions, Nepal, Fiscal 2005–06
• Table 4.5 Composition of Domestic Government Debt, Nepal, Fiscal 2002–07
• Table 4.6 Corporate Debenture Issues, Nepal, Fiscal 1997–2007
• Table 4.7 Cost of Bond Issuance, Nepal, 2007
• Table 4.8 Investment Portfolio of Citizen Investment Trust, Nepal, 2002–06
• Table 4.9 Investment Portfolio of Employees’ Provident Fund, Nepal, 2002–07
• Table 5.1 Financial Market Profile, Pakistan, 2002–06
• Table 5.2 Composition of Debt Securities Market, Pakistan, 2006
• Table 5.3 Trading Volume in Repo Market, Pakistan, Fiscal 2006–07
• Table 5.4 Net Outflow through Treasury Bill Auctions and Open Market Operations, Pakistan, Fiscal 2007
• Table 5.5 Results of Treasury Bill Auctions, Pakistan, Fiscal 2002–07
• Table 5.6 Results of Pakistan Investment Bond Auctions, Fiscal 2001–07
• Table 5.7 Outstanding Balance of National Savings Schemes, Pakistan, Fiscal 2002–06
• Table 5.8 Composition of Domestic Government Debt, Pakistan, Fiscal 2002–06
• Table 5.9 New Equity and Corporate Debt Issuance, Pakistan, Fiscal 2000–06
• Table 5.10 New Issues of Term Finance Certificates, Pakistan, Fiscal 2007
• Table 5.11 Cost of Bond Issuance, Pakistan, 2007
• Table A5.1 Government Debt, Pakistan, Fiscal 2002–07
• Table 6.1 Structure of Financial System, Sri Lanka, 2005–06
• Table 6.2 Features of Government Debt Instruments, Sri Lanka
• Table 6.3 Composition of Domestic Government Debt, Sri Lanka, 2000–06
• Table 6.4 Targets Identified by Sri Lanka’s Medium-Term Strategy for Debt Management
• Table 6.5 Corporate Debt Securities Listed on the Colombo Stock Exchange, 2002–06
• Table 6.6 Secondary Market Activity in Corporate Bonds and Equity, Sri Lanka, 2002–06
• Table 6.7 Cost of Bond Issuance, Sri Lanka, 2007
• Table 6.8 Total Government Debt and Domestic Government Debt by Investor Category, Sri Lanka, 2002–06
• Table 6.9 Composition of Employees’ Provident Fund Investment Portfolio, Sri Lanka, December 2005
• Table 6.10 Performance of Mutual Fund Industry, Sri Lanka, 2002–06
• Table 6.11 Secondary Market Trading of Treasury Bills and Bonds, Sri Lanka, 2001–October 2007