BOND MARKET DEVELOPMENT IN MYANMAR

The subject of this paper discuss about bond market development in Myanmar by evaluation the experiences of Cambodia, Laos and Vietnam. The objectives of the study are (1) to identify the current situations of bond market development in CLMV countries and (2) to examine the requirements for bond market development in Myanmar. Myanmar Government finances the budget deficit by selling bonds so that a study is made on the bond market of Myanmar to learn the extent of coverage of bonds to budget deficit. And then, using online survey questionnaires, research the what kinds of challenges Myanmar face and what Myanmar should do immediately to development the bond market. All those studies are related with key determinants of bond market development of the emerging economies. Myanmar could issue and trade only government treasury bonds and has not yet issued municipal bonds and corporate bonds. In Myanmar bond market, 97.61% of outstanding bonds are in the hands of private investors, especially private banks. Using survey method with describing perceived key factors in all ranking, the overall result indicates that political risk, legal enforcement, legal risk and market risk have been given the largest number of respondents on agree and strongly agree to enhance the bond market in Myanmar. Like other developing economies, government bonds influence as debt instrument in the Myanmar financial sector at the moment. Hence, development of government bond market is the priority issue of Myanmar’s bond market. Based on the finding from analysis of secondary data of bond market in CLMV and results from survey also gives some relevant suggestion for development of bond market in the future. To build an efficient and systematic government bond market the necessary infrastructure of a bond market such as regulatory frameworks, efficient regulatory body, auction method, two-way price quoting system by the primary dealers for bond trading market should be introduced. Moreover, if necessary, it is recommended that Myanmar should seek technical assistance from ASEAN and other multilateral organizations. As suggestion for policy advocacy, to be a successful bond market in Myanmar, those should be considered that to upgrade primary bond market as fully active secondary market, to enhance the liquidity in the secondary market for Government Bonds, to expand investor base in bond market apart from local private and state-owned banks, to be compatible government budget deficit and bond issue plan and to improve awareness of financial knowledge and capital market literature for the general public