East Asian Finance: Securities Markets

Download Chapter 5 “Deepening the Securities Markets” of the report.

The main challenge in further developing the securities markets is to enhance their liquidity and efficiency.  Sizable progress has been made: equity market capitalization has almost tripled for the region as a whole since the crisis, and the value of bonds outstanding has almost quadrupled, since 1997. But significant challenges remain.

Both equity and bond markets in East Asia have expanded significantly since the crisis…

But access to equity markets is still an issue for firms…

And much of the growth in the bond market has been due to government bonds…

Liquidity is a key constraint affecting the efficiency of markets, but also their size…

To deepen the securities markets and further gains in their efficiency, the region needs to strengthen the implementation and enforcement of corporate governance, to further enhance the market and institutional infrastructure, and focus on policy measures to foster a larger and more diversified investor base.  For an in depth discussion of the current state and policy recommendations, please buy or download the report.

Additional reading on this topic

(Please note that these are not necessarily related to the findings of the report, or to the East Asian region in particular.  The views of these readings do not necessarily correspond to the views of the World Bank, its Executive Directors, or the countries they represent.)

La Porta, R., F. Lopez-de-Silanes, and A. Shleifer. 2006. “What Works in Securities Laws?” Journal of Finance  Vol. LXI, No. 1 pp. 1-32.• February 2006.

De la Torre, A.  and S.  Schmukler (2005), “Whiter Latin American Capital Markets?” Mimeo, World Bank.

Djankov, S., R. La Porta, F. Lopez de Silanes, and A. Shleifer. 2005. “The Law and Economics of Self-Dealing” NBER Working Paper No. W11883.

Grose, C. and F. Friedman. 2006. “Promoting Access to Primary Equity Markets: a Legal and Regulatory Approach” World Bank Policy Research Working Paper No. 3892.

Gyntelberg, J., G. Ma and E. M. Remolona. 2005. “Corporate bond markets in Asia ” BIS Quarterly Review, December 2005 (pp. 83-93)

Grose, C. and F. Friedman. 2006. “Promoting Access to Primary Equity Markets: a Legal and Regulatory Approach” World Bank Policy Research Working Paper No. 3892.

Gyntelberg, J., G. Ma and E. M. Remolona. 2005. “Corporate bond markets in Asia ” BIS Quarterly Review, December 2005 (pp. 83-93)

Ma G. and E.M. Remolona. 2005. “Opening Markets through a Regional Bond Fund: Lessons from ABF2”, BIS Quarterly Review, June 2005.