Pundits urge bond market development

Taiwan has the potential to develop one of the region's biggest bond markets in Asia, pundits said at a seminar yesterday.

"Compared to other Asian countries, Taiwan is relatively mature in the disclosure and transparency of corporate financial portfolios as well as with the infrastructure its of bond markets," said Lee Shyan-yuan (李賢源), a finance professor at National Taiwan University.

Another advantage in developing the emerging bond market is Taiwan's AA- country credit rating, which outperforms that of its two rival bond markets in Hong Kong and Singapore, Lee said.

Sharing a similar view, Timothy Matson, chief investment officer of ING Investment Management, said that Taiwan is capable of competing with the second-largest bond market, South Korea, while still lagging behind Japan.

In his presentation, Matson said that the investment company identifies bond markets in India, Korea and Thailand as most vulnerable to higher yields while lumping bond markets in Taiwan, Singapore and Malaysia to generate somewhat higher yields.

Despite the central govern-ment's financial difficulties, Huang Bin-chiung (黃炳鈞), a manager at the GreTai Securities Market, said a tax-break should be granted to foreign investors as an incentive to enter the local bond market.