For example, the Republic of Korea has undertaken measures to encourage the issuance of bonds by SMEs.10 One objective of the Asian bond market initiative11 is to increase bond financing options for smaller companies in Asia.

How Scary Is the Bond Market?

Debt markets would also benefit from such an initiative. Blurring the line between the private and the state owned sectors would, over time, reduce the latter s privileged access to and overuse of bank financing, leading to the expansion of corporate bond markets.

South Africa was the only country in sub Saharan Africa to issue on international bond or equity markets in 1997.

In the product market, a firm competes with other firms for market shares.

11 The Asian Bond Market Initiative was endorsed at the ASEAN 3 Deputies Meeting held in Chiang Mai in December 2002. Its objective is to develop efficient bond markets in Asia.

The US sovereign debt market shows no similar evidence of having reached a limit yet. But bond markets do not issue many early warning signals witness the sudden run up of yields in Italy and Spain a year ago.

DUBLIN Bond markets are notoriously fickle, often driven by sentiment rather than rigorous macroeconomic analysis, and, as the 2008 global financial crisis demonstrated, they are far from infallible. They can also be particularly unreliable when assessing an economy s long term prospects.

Likewise, the development of bond markets has been gaining attention in a growing number of developing countries in all regions, though in many places bond markets are relatively new.

While the market and its development are essential for the operation of firms, the market alone will not be sufficient for the smooth operation of firms.

The Asian bond market and Asian bonds are thus mechanisms for financing for development that also promote greater regional economic stability.

The bonds carry market interest, but the State guarantee is equivalent to a subsidy.

On international financial markets, the war in Georgia has rendered Russian debt and bonds toxic. Interest rates on Russia s bonds have risen by 2 3 percentage points, and many Russian creditors no longer have access to international capital markets.

In order to solve the problem of non payments to one another, to make use of the potential of commercial banks and of bills of exchange and promissory notes issued by enterprises

In the bond market, since June, due to the influence of multiple factors such as fundamentals and investor sentiment, the bond market has taken on a trend of improvement.

However, since the dynamics of domestic currency bond markets are linked to external bond markets, they are not immune to external volatility, and recent experience calls into question the effectiveness of local capital markets as a buffer against external volatility, particularly for a country considered as a high credit risk.

Surprisingly, the bond market still seems almost oblivious to this risk. But holders of US debt worldwide have every reason to be concerned.

In other words, SMEs from Singapore remain interested in regional markets rather than global markets.

The healing process is also evident in Europe, though, unfortunately, it is effectively limited only to sovereign bond markets. The real economy remains under enormous pressure in several countries, as economies contract and unemployment remains alarmingly high.

This reaching for yield has driven up the prices of all long term bonds to unsustainable levels, narrowed credit spreads on corporate bonds and emerging market debt, raised the relative prices of commercial real estate, and pushed up the stock market s price earnings ratio to more than 25 higher than its historic average.

However, many of the liberalized provisions such as liberal access to overseas financial markets and international securities markets did not help SMEs to engage in OFDI, as many of them did not have the capability to do so.

2. Corporate strategies for seizing market opportunities

Moreover, a consortium might not have access to the financial market for the purpose of raising funds, where only corporations are authorized by the law to issue negotiable instruments and securities such as stocks, bonds and debentures.

Sovereign obligations, such as bonds, are commonplace in the capital markets, and demonstrate strong investor demand and confidence.

Market vitality comes from people, especially from entrepreneurs, from entrepreneurship.

SMEs from Singapore remain interested in regional markets rather than global markets but the larger enterprises are investing as farafield as in Europe, the Middle East and Africa.

There have also been initiatives in some countries to increase bond financing options for SMEs.

When the US housing market started to turn south, the biggest underwriters (such as Countrywide) did not go bankrupt right away, because they had sold the vast majority of their loans to the CDO market. Eventually, however, the uncertainty created by these CDOs nearly brought down the entire US banking system.

Agreement for the Establishment of a Common

With no current account surplus, China would no longer be a net purchaser of US government bonds and other foreign securities. Moreover, if the Chinese government and Chinese firms want to continue investing in overseas oil resources and in foreign businesses, China will have to sell dollar bonds or other sovereign debt from its portfolio.

In 2003, a policy was pursued whose aim was to ensure the stability of the financial market, the further development of the insurance market and the securities market, and the strengthening of the banking system and accessibility to financial resources for enterprises of the real sector of the economy, as well as the improvement of the capital accumulation pension system.

Developing countries are increasingly financing their infrastructure through international capital markets, a trend reflected in the growth of their commercial bank borrowing and their increased use of bond and equity markets.

Of the roughly 200 trillion in global financial assets today, almost three quarters are in some kind of debt instrument, including bank loans, corporate bonds, and government securities. The derivatives market certainly helps spread risk more widely than this superficial calculation implies, but the basic point stands.

Limit access to a market or free competition among enterprises

Local currency government debt markets have performed fairly well during the crisis, while local currency corporate debt markets have played a more modest role as a vehicle for longer term finance. This suggests that domestic reforms aimed at reducing issuance costs, improving disclosure requirements, enhancing creditors rights frameworks, and tackling other inhibiting factors could bring high returns.

The solution suggested by the Governor was to borrow about 400 million on the bond market to offset the deficit.

We see ever growing support for the proposal to develop an Asian bond market, which I put forth in 2001.

Linkages with local businesses can also help the latter to explore new export or product markets.

Prospects for the world steel market and opportunities for new entrants, in particular for developing countries

38. Between 1989 and 1997, officially supported programmes and associated market swap operations reduced developing countries debt to commercial banks by 53.2 billion, equivalent to 23 per cent of the 231.2 billion of eligible commercial bank debt.

It nurtures a pro business environment that encourages enterprise formation and growth, facilitates the growth of industries, enhances the productivity, innovation and capabilities of enterprises, and helps increase access to markets and business opportunities.

(2)Where an enterprise holds the assets or liabilities that can be used to counteract the market risks, it may adopt the middle price of the market to determine the fair value of the positions that can counteract the risks of the market meanwhile, the offer or charge shall be the basis for determining the fair value of net exposure.

Foreign enterprises are increasingly investing in emerging markets.

At the same time, SMEs face increased competition in both domestic and international markets.

38 For example, through strengthening institutions that provide long term finance, such as development banks and, where appropriate, bond markets.