Development of the Taiwan Government Bond Market(ppt 33页).ppt

BySusanS Chang DevelopmentoftheTaiwanGovernmentBondMarket DirectorGeneralDepartmentofNationalTreasuryMinistryofFinanceTaiwan R O C 2 Contents Introduction ThePrimaryMarket issuingandoutstandingamounts TheStructureofPrimaryMarket TheSecondaryMarketV PoliciesandMeasures FutureOutlook ConcludingRemarks 3 Introduction TheGovernmentbondsisaveryimportantinstrumenttoraisefundsforgovernmentprojectsandexpenditure Thegovernmentbondmarketalsoplaysankeyroleinstrengtheningthefinancialsector Inthisregard manycountrieshavetryveryhardtodevelopasoundgovernmentbondmarket ThesameistrueforROCgovernment Inlasttenyears theTaiwangovernmentbondmarketgrewveryfast andmanypoliciesandmeasureshadbeentakentoimprovethemarket 4 Theprimarymarket 1 HistoricaloverviewThefirstissuanceofthegovernmentbondscanbetracedto19494kindsofbondswereissuedPatriotbondShort termBondAnnualBondConstructionBond 5 TreasuryBondsSoldbytheCentralGovernment 6 Before1975 aspeciallawshouldbepassedaccompanyingtheannualbudgetbilltolegalizethebondissuance In1975 Apermanentlaw TheStatuteforIssuingCentralGovernmentConstructionBonds waspromulgatedinsubstitutionfortheannuallaw 7 2 ThestatusofgovernmentbondsIssuingamount 8 Outstanding amount 9 Outstanding aspercentageofGDP 10 Thestructureofprimarymarket June 2000 1 Maturity 11 2 Couponratesofissuing 12 3 BidderofissuanceBiddingqualification authorizedcentralgovernmentbondprimarydealersThepresentauthorizeddealersinclude Banks19SecuritiesFirms38BillsFinancingCompanies13InvestmentTrustCompanies3 13 4 HolderofgovernmentbondsAuthorizeddealers50 60 Banks35 45 Securitiesfirms10 20 BillsFinancingcompaniesInvestmenttrustcompaniesOthers40 50 14 TheSecondaryMarket Before1990 withgoodfiscalsituation issuanceofgovernmentbondshadbeenverysmall Thetransactionvolumeofstocksismorethanthatofgovernmentbonds After1990 inordertofundmanymajorinfrastructureprojects theissuanceofbondsincreasedsharply Thisledtothethrivingofthesecondarymarket From1992 except1994 thetransactionvolumeofgovernmentbondssurpassesthatofstocks 15 Bonds Stocksmarkettradingvolume 16 However themajorbondtransactionisontherepurchasebasis outrightpurchasetransactionisfew 17 Thetradingsystemofthesecondarymarket1 OrganizedexchangePlayers securitiesdealers brokersMatchingmethod computerbiddingFee 0 1 0 05 dependingontradingvolumeSettlement T 2 18 2 OTCPlayers securitiesdealers brokersandinvestorsTradingmethod bargaindirectlywithdealers orthrough Equivalentyieldmatchingsystem automaticallymatching Fee freeSettlement T 3orT 2 19 YieldCurve 20 BondTrading 21 V PoliciesandMeasures 1 ImprovementofissuingsystemFromallocationtocompetitivebiddingFrompriceoffertointerestrateoffer2 IncreaseofvarietyofbondsIssuinglonger termbondsIssuedfirst10 yearbondinSep22 1993Issuedfirst15 yearbondinJun16 1995Issuedfirst20 yearbondinNov24 1998 22 Issuingzero couponbondUsingDutchbiddingschemetoissuetwotrenchesofzero couponbondinOct20 1995 3 ProvidingpurchasingchanneltominorinvestorsFromApr 1993 2 oftheissuedamountisreservedforminorinvestors DirectorateGeneralofPostsiscommissionedtoselltominorinvestors through141postoffices 23 4 Changetobook entrybondsInSep 1997firstbook entrybondswasissuedsuccessfully andasettlementbanksystemisused UptoJune2000 NT 310billionbook entrybondshavebeenissued Thesettlementbanksalsoincreasedfrom7to14 SinceJan15 1999 Thetransformationofphysicalformbondstobook entryoneshasbeenavailable Thesettlementbanksplaytheroleaswindows 24 Thepercentageofbook entrytothetotaloutstandinggovernmentbonds 25 4 ProvidingmoreissuinginformationWorkingtowardregularissuanceMakingannouncementonthebondissuingplaninquarterbasis 26 5 ToincreasemarketliquiditySomesurveysshowedthatAsmallamountofasingleissuancealwaysledtolittletransactioninthesecondarymarketforthatissuance Anewissuancewiththesamematurityaslastoneoftenresultsinlowliquidityofthelastissuance 27 MeasurestakenToseteachissuanceamountataboutNT 30billion Topreventissuingtwocontinuoustrenchesofbondswiththesamematurity Introductionofreopeningschemeisunderconsideration 28 V FutureOutlook 1 Toimprovemanagementofgovernmentdebt2 Tostudythepossibilityofissuanceonregularbasistoreducethenegativeimpactoftheirregularissuanceonthemonetarymarket 29 3 Tomakegovernmentbondsasabenchmarkindicator Ataskforcewassetuptodiscussrelatedissuesandtoworkoutpossiblesolution Issuing30 yearbondisunderstudytomeettheneedsofmarketandtohelpconstructingyieldcurveswithshort medium andlong terminterestrate 30 4 Toattractmoreparticipationofminorinv