(855) 4-ESSAYS

Type a new keyword(s) and press Enter to search

FUTURE PROSPECTS OF THE HONG KONG DEBT MARKET


             Historical Market Constraints .
             Bond markets have assumed important roles in the capital markets of most developed countries. Issuing bonds allows large corporations to raise long-term funds at reasonable costs. Bonds also offer investors an alternative to bank deposits with prospects of capital appreciation at lower risks than equities. Debt market in Hong Kong, both the primary and the secondary market had been underdeveloped for various reasons, which could be categorized into supply and demand constraints. .
             Supply constraints.
             Supply of bonds from government and corporations, had long been limited. Hong Kong Government's fiscal policy had been conservative and had accumulated huge surpluses prior to 1997. There was no need for the government to issue government debts securities for deficit financing. This, in addition to the lack of government bonds, creates also a lack of risk-free benchmark interest rate for fixing corporate bond yields. Stamp duty and unfavourable tax treatment of corporate bond discourages debtor companies to finance through bond issuance. Together with the dominance banking sector, bank lending was much preferred by these companies. .
             Demand constraints.
             On the demand side, the majority of retail investor is risk and yield craving. This drove investments and development in equity markets instead of debts. The lack of mandatory provident scheme prior to 2000 together with the absence of bond rating had kept demand for bond investment down.
             Earlier attempts and current constraints.
             In view of the underdevelopment of the bond market, the government has launched a variety of measures to tackle the problem during the 1990's. Like many other economies in East Asia, Hong Kong debt market gained a major boost with the introduction of government debt paper, the Exchange Fund Bills and Notes (EFBN), in 1990. From 1990 to 1995, gross issues of debt papers tripled to HK$247 billion, of which nearly almost half are private sector issues.


Essays Related to FUTURE PROSPECTS OF THE HONG KONG DEBT MARKET

1. The Asian Economic Crisis Of 1997 - 1998

Next, an analysis of how to avoid these problems in the future and what the repercussions will be in the Asian and Global markets will be discussed. ... Since 1960 the region's top performers---Japan, Hong Kong, South Korea, Singapore, Taiwan, Indonesia, Malaysia and Thailand---grew more than twice as fast as the rest of East Asia, three times as fast as Latin America and South Asia, and five times faster than sub-Saharan Africa. ... Many times, the projects that these firms came up with seemed to overlook the risk factor of their future endeavors altogether. ... A country can successfull...

  • Word Count: 1820
  • Approx Pages: 7
  • Has Bibliography
  • Grade Level: High School

2. IBAC

Introduction International Banking Credit Analysis Ltd (IBCA) was a leading European credit rating agency with offices in London, New York, Tokyo, Singapore, Hong Kong, Argentina, Brazil, South Africa, and Australia. ... To correspond with their challenges with global expansion, are the issues they face in their long-term prospects. ... The Latin American markets, and the Asian markets are the markets with the most growth potential. ... Their strengths are financial institutions (banks), insurance companies, corporations, and sovereign countries, while Duff & Phelps, a proportional size firm,...

  • Word Count: 2065
  • Approx Pages: 8

3. Chinese Economic Shifts After Mao

While "the gross output value of industry and agriculture increased by 810 percent and national income grew by 420 percent [between 1952 and 1980] ... average individual income increased by only 100 percent" (Ma Hong quoted in Shirk 28). ... In addition, in an effort to allow the market to determine prices, "city prices of fruit and vegetables, fish, meat, and eggs, were freed from government controls so they could respond to market demand" (Shirk 39). ... Indeed, when the policy was first implemented, many Chinese seem[ed] to fear that Deng's policies [were] drawing Chi...

  • Word Count: 4412
  • Approx Pages: 18
  • Has Bibliography
  • Grade Level: High School

4. Chinese Econmic Reform

average individual income increased by only 100 percent" (Ma Hong quoted in Shirk 28). ... In addition, in an effort to allow the market to determine prices, "city prices of fruit and vegetables, fish, meat, and eggs, were freed from government controls so they could respond to market demand" (Shirk 39). ... Indeed, when the policy was first implemented, many Chinese seem[ed] to fear that Deng's policies [were] drawing China back toward its former semi-colonial status as a "mar...

  • Word Count: 8272
  • Approx Pages: 33
  • Has Bibliography
  • Grade Level: High School

5. Russain Currency Crash In August 1997

In the following paper, I will describe the state of the Russian economy, how it got there, prospects for the future and recommendations regarding impact on U.S. investors. ... In August of last year, the Russian government defaulted on $40 billion worth of debt in ruble bonds, rocking the world's economy. ... Future Outlook For the future, Russia is expected to continue to flirt with financial disaster. Approximately $17 billion in debt due this year, but the real crunch was in July of 1999 when due to a fluke of timing, Russia's payment to the IMF shot up from below $400 millio...

  • Word Count: 4431
  • Approx Pages: 18
  • Has Bibliography

6. Chinese Economics

Capitalism is an economic system characterized by freedom of the market and Communism is an economic system in which one does not have freedom because the government will make your decisions for you. ... While "the gross output value of industry and agriculture increased by 810 percent and national income grew by 420 percent [between 1952 and 1980] ... average individual income increased by only 100 percent" (Ma Hong quoted in Shirk 28). ... In addition, in an effort to allow the market to determine prices, "city prices of fruit and vegetables, fish, meat, and eggs, were freed from government ...

  • Word Count: 6375
  • Approx Pages: 26
  • Has Bibliography
  • Grade Level: Undergraduate

Got a writing question? Ask our professional writer!
Submit My Question