Government Bond Market Development in Myanmar

Transcription

1 Government Bond Market Development in Myanmar Daw Si Si Pyone Deputy Director General Treasury Department Ministry of Planning and Finance 1

2 Outlines I. Key Milestones in Development of Treasury Securities II. Current Situation of Issuance of Treasury Securities III. Investor Relationship IV. Next Steps & Challenges 2

3 Key Milestones in Development of Treasury Securities 3

4 Ministry of Planning and Finance Key Documents Interagency Agreement with Central Bank of Myanmar Treasury Bill Offering Memorandum Treasury Bond Offering Memorandum 4

5 Key Milestones 28 January 2015 First 3-months Treasury Bill Auction 30 November 2015 Paper-based issuance of Treasury Bonds ceased 5 January 2016 Treasury Bonds converted to Scripless 5 January 2016 Public Debt Management Law was published 4 May 2016 First 6-months Treasury Bill Auction 15 June 2016 First 12-months Treasury Bill Auction 19 August 2016 Medium Term Debt Strategy for 2016 approved by Parliament 20 September 2016 First Treasury Bond Auction 2 November 2016 Foreign Banks began participating in the Treasury Bill Auctions 17 January 2017 Securities Companies began participating in the Treasury Bond Auctions 21 February 2017 Foreign Banks began participating in the Treasury Bond Auctions 1 June 2017 Government Annual Debt Report for approved by Parliament 28 June 2017 Medium Term Debt Strategy for 2017 approved by Parliament 5

6 Key Market Development Milestones Auctions Introduced Private and Public Banks Scripless Bonds Foreign Banks Securities Companies Insurance Companies Longer-term Bond Maturities Two Bonds per auction Bond Switch operations

7 Treasury Securities in Myanmar No Treasury Bills Treasury Bonds 1 Auction Commencement Auction Days Wednesday Tuesday 3 Auction Frequency Twice a month Once a month 4 Settlement Date T+2 5 Auction Pricing Convention Multiple Price 6 Minimum Bid Amount Kyat 500 million 7 Participants Requirements Bank Account at CBM 8 Registry Central Bank of Myanmar 9 Settlement CBM-Net 10 Maturities 3, 6, 12 months 2-3 years 11 Auctions Completed (up to )

8 Scripless Treasury Bonds (Kyat billion) (up to ) Coupon 15/11/ /5/ /11/ /5/ /11/ /5/ /11/ /5/ Total

9 Current Situation of Issuance of Treasury Securities 9

10 Treasury Bill Issuance Percentage by Maturity 7% 3% 3 month 6 month 12 month 90% 10

11 Kyat billion Kyat billion Treasury Securities Bids Submitted v Bids Successful (up to ) Treasury Bill Treasury Bond offer bid success offer bid success month 6 month 12 month Total 11

12 Jan 2015 Feb 2015 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 Nov 2016 Dec 2016 Jan 2017 Feb 2017 Mar 2017 Apr 2017 May 2017 Jun Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun-17 Treasury Bills Outstanding Treasury Bills Outstanding by Maturity (Kyat billion) Total Treasury Bills Outstanding (Kyat billion) 1,400 1,400 1,200 1,200 1,000 1, months 6-months 12-months 12

13 (Kyat billion) Total Treasury Bonds Outstanding 1,400 1,200 1, Underwriter Auction Converted Fiscal Year 13

14 Outstanding Amount (Kyat billion) Auctioned Bond Outstanding /5/ /5/ /5/ % 9.25% 9.50% Coupon Rate 14

15 30-Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun-17 Weighted Average Yield in Treasury Bill Auctions 10% Percent 9% 9% 8% 8% 3-months 6-months 12-months 7% 7% 6% 15

16 Investor Relationship 16

17 Issuance Amount Investor Base Treasury Bill Treasury Bond Public Banks Private Banks Foreign Banks Securities Companies Insurance Companies 17

18 Investor Relations Program Market consultation is undertaken by DMD twice a year in Yangon and Nay Pyi Taw Questionnaires are issued to investors for new instruments and maturities Workshops and Forum are held to increase awareness and educate investors Training workshops are used when new initiatives are introduced such as bond buyback or switching 18

19 Next Steps & Challenges 19

20 Next Steps 5-year Treasury Bond Two Treasury Bonds Offered in Auctions Instructions for Securities Companies Bond Market Development Master Plan Development of Secondary Market and Repo Market Buyback and Switch Operations Further Develop Investor Relations Program 20

21 Challenges Need more participants in the auctions Need to broaden the investor base Need to develop the secondary market Need to implement an auction bidding system Need to establish the repo market Need to issue securities regulations Need to raise awareness and educate investors Need to consider the retail investors Need to develop a Bond Market Development Master Plan 21

22 Thank You 22