Financial market integration and Asian bond market initiatives

Financial integration especially in Asian financial market has been a defining feature of the world economy and has become a central issue in international finance for the past decades. However, there is limited empirical studies on the integration of Asian bond market. Therefore, this study aims to examine the financial market integration in Asia (Stock and Bond Market). The sample of this study is the major of Asian financial markets including Japan, China, Hong Kong, Singapore and South Korea during January 2009 – December 2016. Correlation, co-integration and causality tests used in this study to investigate the financial markets integrations. This study shows that both stock and bond returns are co-integrated and indicate as a common stochastic trends. Stock market integration appears to be much stronger compared to the less developed. This result is very important for investors to assess potential gains from portfolio diversification, and for a financial policymaker to manage market policies effectively and handle contagion risks that might be caused by international shock transmissions.

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Assessing Financial Market Integration in Vietnam: A Price – Based Approach

Academic Journal of Interdisciplinary Studies ◽

10.36941/ajis-2020-0066 ◽

2020 ◽

Vol 9 (4) ◽

pp. 105

Author(s):

Tran Thi Xuan Anh ◽

Ngo Thi Hang ◽

Nguyen Thi Lam Anh

Keyword(s):

Stock Market ◽

Financial Market ◽

Market Integration ◽

Bond Market ◽

Stock Market Integration ◽

Financial Market Integration ◽

Beta Coefficient ◽

Integration Levels ◽

Beta Convergence ◽

Global Stock

This paper investigates the existence of financial market integration between Vietnam and the region (ASEAN, ASIAN) as well as the world using price-based indicators. Our paper is the first to assess the overall integration of the Vietnam financial market based on two different datasets for different sub-capital markets, the bond market and stock market, during the period of 2009 - 2018. The empirical results show that Vietnam, compared to other countries in research, holds lower regional and international integration levels in both the bond market and the stock market, but demonstrates considerably strong signs of progressing regional and global stock market integration over the period. Especially, the absolute values estimated from the beta coefficient and beta convergence approaches for the Vietnamese stock market are larger than for the bond market, proving better convergence degree and speed of Vietnamese stock market over the bond market. These bring policymakers and regulators new thoughts and more challenges in designing appropriate policies towards the development of the financial markets in the future.

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