Publication: Malaysia : Bond Market Development
International Monetary Fund
This paper pertains to the bond market development in Malaysia, and provides an overview of the market scenario in the country. Malaysia has been successful in developing the capital markets, particularly bond markets, in the recent past. Now, it faces the challenge of how to improve broader access and efficiency of the bond market. A high degree of investor concentration, dominated by government pension funds, plays a significant role in impeding the growth of higher-yield bond market. The role of the government in stimulating the growth of the bond markets should be now shifted toward encouraging more diversity. In order to promote risk diversity, significant measures should be taken to increase competition on the demand side. Another important challenge for the bond markets going forward is improving transparency to make them more attractive to a broader constituency. To improve liquidity and transparency, the authorities should encourage the establishment of open, independent electronic platforms that integrate price search, negotiation, and trading of bonds. It is felt that while Malaysia has seen success in the bond markets, there is scope for further improvement.
“International Monetary Fund; World Bank. 2013. Malaysia : Bond Market Development. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/16713 License: CC BY 3.0 IGO.”