scholarly journals Financial structure and the development of domestic bond markets in emerging economies

2018 ◽  
Vol 21 (1) ◽  
pp. 86-112 ◽  
Author(s):  
Iain Hardie ◽  
Lena Rethel
Keyword(s):  
Emerging Economies ◽  
Developing Economies ◽  
Emerging Market ◽  
Secondary Data ◽  
Corporate Bond ◽  
Market Development ◽  
Bond Markets ◽  
The North ◽  
Domestic Debt ◽  
First Time

AbstractIn the period from the 1990s emerging market financial crises until the North Atlantic financial crisis of 2008, the development of domestic bond markets in developing economies was a prominent agenda item in international financial reform circles. The crises of the 1990s drew attention to the vulnerabilities generated by frequently occurring double mismatches of currency denominations and maturities in the borrowing of emerging economies. This led to a series of reform efforts targeted at both increasing liquidity and the range of borrowers in domestic bond markets. In the aggregate, these efforts were successful: For emerging market economies as a whole, domestic debt now exceeds international debt. Moreover, domestic corporate bond markets have emerged in many countries, often for the first time. However, the nature of market development has been far from uniform, and often has not been in line with government aims. In this paper, we examine the interplay of government and business actors in market development. Drawing on 155 interviews with policy and market actors as well as secondary data, we show that the main explanation of variation in market development lies in the pre-existing structure of financial markets, conceptualized as a heterogeneous set of interest/influence constellations.

scholarly journals Guidance Note For Developing Government Local Currency Bond Markets

2021 ◽  
Vol 21 (001) ◽  
Author(s):  
◽  
Keyword(s):  
Technical Assistance ◽  
Developing Economies ◽  
Emerging Market ◽  
World Bank Group ◽  
Bond Markets ◽  
Sector Reform ◽  
Local Currency ◽  
Guidance Note ◽  
Financial Sector Reform ◽  
Bank Group

This guidance note was prepared by International Monetary Fund (IMF) and World Bank Group staff under a project undertaken with the support of grants from the Financial Sector Reform and Strengthening Initiative, (FIRST).The aim of the project was to deliver a report that provides emerging market and developing economies with guidance and a roadmap in developing their local currency bond markets (LCBMs). This note will also inform technical assistance missions in advising authorities on the formulation of policies to deepen LCBMs.

ECB's QE will buoy EM bond markets

2015 ◽  
Keyword(s):  
Interest Rates ◽  
Developing Economies ◽  
Emerging Market ◽  
Investor Sentiment ◽  
Central Banks ◽  
Capital Inflows ◽  
Bond Markets ◽  
Quantitative Easing ◽  
Content Type ◽  
Large Current

Subject Opposite forces are shaping investor sentiment towards EM assets. Significance Investor sentiment towards emerging market (EM) assets is being shaped by the conflicting forces of a strong dollar and the launch of a sovereign quantitative easing (QE) programme by the ECB. While the latter is likely to encourage investment into higher-yielding assets, such as EM debt, the former will keep the currencies of developing economies under strain, particularly those most sensitive to a rise in US interest rates due to heavier reliance on capital inflows to finance large current account deficits, such as Turkey and South Africa. Impacts EM bonds will benefit from ECB-related inflows, while the strength of the dollar will keep local currencies under strain. Higher-yielding EMs will benefit the most from the ECB's bond-buying scheme since they provide the greatest scope for 'carry trades'. The collapse in oil prices is forcing EM central banks to turn increasingly dovish, putting further strain on local currencies.

Central European local investors will hold on to bonds

2017 ◽  
Keyword(s):  
Emerging Market ◽  
Bond Markets ◽  
Content Type ◽  
Developed Economies ◽  
Local Currency ◽  
Domestic Debt ◽  
The Us ◽  
Debt Market ◽  
Us Presidential Election ◽  
To Come

Significance The lira’s collapse is fuelling outflows from Turkey’s local currency government debt market, as foreign investors reduce their purchases of emerging market (EM) domestic debt amid a sharp sell-off in bond markets following Donald Trump’s upset victory in the US presidential election. Both Hungary and Poland -- hitherto two of the most resilient EMs -- suffered net outflows last year and are likely to come under further pressure as the ECB starts to scale back, or ‘taper’, its programme of quantitative easing (QE) in April. Impacts The dollar’s rise against a basket of other currencies since the US election will put severe strain on EM assets. The surging price of Brent crude is improving the inflation and growth outlook. Higher international oil prices will also reduce the scope for further easing of monetary policy in developing and developed economies.

The Role of Macroeconomic and Financial Factors in Bond Market Development in Selected Countries

2020 ◽  
pp. 097215092090720
Author(s):  
Ameenullah Aman ◽  
Mohamad Yazid Isa ◽  
Asmadi Mohamed Naim
Keyword(s):  
Recurrent Events ◽  
Developing Economies ◽  
Panel Data Analysis ◽  
Banking System ◽  
Financial System ◽  
Bond Market ◽  
Market Development ◽  
Bond Markets ◽  
Primary Role ◽  
Macroeconomic Factors

Both developed and developing economies have showed serious interest in the development of domestic and regional bond markets. This interest was motivated by the recurrent events of economic crises, due to the over-reliance on the banking system. Therefore, this study investigates the macroeconomic and financial determinants of a bond market development, since the economic and financial environments play a primary role in the development of any financial market. Panel data analysis is employed to investigate the potential relationships. Results identify that financial system and most of the macroeconomic factors are positively associated with a bond market development. However, the stage of economic development is negatively related to bonds. Hence, policymakers need to strengthen and use existing financial system and economic variables to provide reasonable support to the development of bond markets. This study empirically analyses some unexplored theoretical relationships with respect to a bond market.

Indian Corporate Bond Market: An Analysis of Growth and Impact of Macroeconomic Determinants

2019 ◽  
Vol 23 (3) ◽  
pp. 244-254
Author(s):  
Pooja Neemey ◽  
Namita Sahay
Keyword(s):  
Secondary Data ◽  
Bond Market ◽  
Corporate Bond ◽  
System Stability ◽  
Bond Markets ◽  
Economic Variables ◽  
Market Growth ◽  
Corporate Bond Market ◽  
Dependent Variables ◽  
Macroeconomic Determinants

Robust, deep and vibrant corporate bond markets are necessary to increase financial system stability of a nation, help the needs of credit and mitigate financial crises of corporate sector that is important for the economic growth. The present article focuses on Indian corporate bond market growth and its impact on some select monetary, fiscal and economic variables as this creates advantages for investors, corporates and governments from 2006–2007 to 2016–2017. The study used the secondary data collection method with the help of monetary, fiscal and economic variables as independent variables and yield rate as dependent variables. From the analysis, it was identified that a complete corporate bond market is associated with economic, monetary and fiscal variables neither negatively nor positively nor at a significant rate. The result of the analysis concludes that among all the selected variables, GDP in percentage is considered as the chief variable that is predominantly mandatory for India because it is commencing its bond market with the foreign participants.

On the linkage between stock market development and economic growth in emerging market economies

2015 ◽  
Vol 14 (4) ◽  
pp. 363-381 ◽  
Author(s):  
Pramod Kumar Naik ◽  
Puja Padhi
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Emerging Economies ◽  
Emerging Market ◽  
Market Development ◽  
Data Series ◽  
Annual Data ◽  
Content Type ◽  
Stock Market Development ◽  
The Impact

Purpose – The purpose of this study is to empirically examine the impact of stock market development on the economic growth for a panel of 27 emerging economies using annual data over the period from 1995 to 2012. Design/methodology/approach – A second-generation panel unit root test developed by Pesaran (2007) has been used to test the stationary properties of the data series. To achieve the study objectives and to mitigate the endogeneity problem that exists in the given model, the authors use a dynamic panel “system GMM” estimator. The authors also use a heterogeneous panel causality test proposed by Dumitrescu and Hurlin (2012) to examine the direction of causality among the variables. Findings – The empirical findings indicate that stock market development significantly contributes to economic growth. Further, a unidirectional causality running from stock market development to economic growth has been found. This finding is consistent with the supply-leading hypothesis. Besides stock market development, it is also evident that macroeconomic variables, such as investment ratio, trade openness and exchange rates, have significant impact on economic growth. Research limitations/implications – The findings suggest that a well-functioning stock market, a more globalized economy and increasing aggregate investment can potentially foster the economic growth in those emerging economies. Originality/value – Unlike other studies, this study constructs three alternate composite indices along with the individual indicators of stock market development and applies robust panel econometric techniques to establish more reliable results.

scholarly journals Better together: Active and passive labor market policies in developed and developing economies

2021 ◽  
Vol 12 (1) ◽  
Author(s):  
Clemente Pignatti ◽  
Eva Van Belle
Keyword(s):  
Labor Market ◽  
Emerging Economies ◽  
Developing Economies ◽  
Market Effects ◽  
Labor Market Policies ◽  
Active Labor ◽  
Macroeconomic Impact ◽  
Active Labor Market Policies ◽  
First Time ◽  
Active Labor Market

Abstract We investigate the macroeconomic impact of public expenditure in active labor market policies (ALMPs) and passive labor market policies (PLMPs) on main employment indicators (i.e., unemployment, employment, and labor force participation) for a large and novel panel database of 121 countries (36 developed, 64 emerging and 21 developing economies). Compared to previous studies, we include for the first time evidence from developing and emerging economies and explicitly examine the possible presence of complementarities between active and passive policies. We find that the interaction between interventions is crucial, as the effect of spending in either of the two policies is more favorable the more is spent on the other. Even the detrimental labor market effects of passive policies disappear on the condition that sufficient amounts are spent on active interventions. This complementarity seems even more important for emerging and developing economies.

Latin American local bond markets prove resilient

2015 ◽  
Keyword(s):  
Local Government ◽  
Latin American ◽  
Foreign Investment ◽  
Developing Economies ◽  
Emerging Market ◽  
Insurance Companies ◽  
Bond Markets ◽  
Government Bond ◽  
Content Type ◽  
Government Bond Markets

Subject Foreign investment in local government bond markets. Significance In stark contrast to the sharp declines in emerging market (EM) equity markets, down by 9.3% in dollar terms this year, the domestic government bond markets of developing economies remain relatively resilient, despite the dramatic falls in EM currencies. Latin America's main local debt markets have attracted the largest inflows of foreign investment among the main EM regions, with non-resident investors even increasing their holdings of Brazilian and Colombian domestic bonds this year in the face of declines of 46% and 23% in their respective currencies. Impacts China's latest interest rate cut on October 23 will put more pressure on many commodity-dependent EM economies. EM local government bond markets are underpinned by domestic institutional investors, such as pension funds and insurance companies. EM dollar-denominated government debt will prove more resilient than local currency bonds. However, companies with large external debts are vulnerable because of sharp falls in local currencies.

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