ADB to establish website for bond market

The Asian Development Bank (ADB) will establish an Asian Bonds Online web site to foster development of mature bond markets in Asia through a $2.4-million grant which will come from the Japan Fund for Information and Communication Technology (JFICT).

To be launched in May this year, the website will be a one-stop clearing house of information on sovereign and corporate bonds issued in the member countries of the Association of Southeast Asian Nations plus People’s Republic of China, Japan, and Republic of Korea (ASEAN+3).

The grant will support development and operation of the new site up to the end of 2006.

The website will provide information in three main areas: market activities, including bond issuances, trading activities, and market analyses and reviews; legal and regulatory frameworks, including the tax and bankruptcy laws, and institutional settings of bond markets; and, government policies and initiatives, providing links and a forum for policymakers and market participants to exchange ideas.

"The website will not only prove valuable to existing investors and issuers, but should help attract new investors who have not invested in Asian bond markets because of the high cost of accessing the right information," Yoshihiro Iwasaki, head of ADB’s Regional Economic Monitoring Unit (REMU) said. "We hope the site will prove a catalyst in promoting bond market development in Asia. It will not only help increase transparency, liquidity, and depth of the markets, but also lower funding costs for bond issuers and create greater cross-border flows."

The REMU, which will run the website, is also responsible for the operations of the Asia Recovery Information Center, launched in 1999.

Following the 1997 Asian financial crisis, development of the bond markets became an important policy reform agenda item for many Asian governments.

More developed and mature bond markets would enable the private and public sector of Asian countries to raise and invest long-term capital and effectively manage maturity and currency risks, reduce economic and financial vulnerabilities, and support economic growth.

There have been several recent initiatives to support bond market development in Asia, including the Asian Bond Fund established by the Executives’ Meeting of the East Asia Pacific Central Banks (EMEAP), the regional bond market development initiatives of the Asia-Pacific Economic Cooperation, and the Asian Bond Markets Initiative (ABMI) of the ASEAN+3 group. – Ted Torres