The COVID‑19 crisis has led to unprecedented health, social and economic costs and has exacerbated vulnerabilities in economies around the world. Effective early steps by Asian economies to contain the pandemic cushioned the blow to the region’s markets. Importantly, the fact that today over half of the world’s listed companies are listed on an Asian stock exchange allowed them to tap into equity markets during the crisis on a large scale. During 2020 and 2021, more than 3 500 already-listed Asian companies were able to raise USD 669 billion from public equity markets.
Asian capital markets and corporations deserve special attention due to their importance in global markets, their integration into regional and global supply chains, and their ownership structures. With this in mind, this report analyses some of the long-term trends in Asia’s listed corporate sector. It also looks at how Asian companies used market-based financing during the pandemic, and the main fiscal and regulatory measures Asian authorities took to support the corporate sector’s access to finance during this period.
The report covers the main aspects of the capital market ecosystem in Asia:
The first chapter provides an overview of the non-financial corporate sector over the last two decades. Using firm-level data, it offers analysis of corporate capital structures, performance and investment activity, as well as the use of market‑based financing and the ownership structure of listed companies. It also shows long-term trends on how Asian companies have been using both equity and bond markets to raise capital.
The second chapter shows how Asian companies were able to access financing by using equity and corporate bond markets during the COVID‑19 pandemic. It also takes stock of the fiscal and regulatory measures implemented by Asian authorities to respond to the pandemic and mitigate the effects on the corporate sector.
Strengthening corporate sector resilience will require further efforts to adapt existing legal and regulatory frameworks so that capital markets can better play their role of channelling financial resources towards long-term investments. Corporate governance frameworks also need to be enhanced to provide investors, corporations and other stakeholders with tools and incentives adapted to the post COVID‑19 environment.
The trends presented in this report and the initial impact on the corporate sector during the pandemic provide a starting point for understanding the long-term effects of the crisis and the challenges ahead for Asia’s corporate sector.
This report is part of the OECD Capital Market Series, which informs policy discussions on how capital markets can serve the important role of channelling financial resources from households into productive investments in the real economy.
A set of selected indicators and detailed description of data sources as well as the methodology for data collection are provided in the annex. This report has benefited from discussions with and feedback from participants in the OECD‑Asia Roundtable on Corporate Governance.
The Review was prepared by a team led by Serdar Çelik, Acting Head of the Corporate Governance and Corporate Finance Division within the OECD Directorate for Financial and Enterprise Affairs, and composed of Thomas Dannequin, Adriana De La Cruz, Carl Magnus Magnusson, Alejandra Medina, Tugba Mulazimoglu and Yun Tang. The report benefited from the financial support of the Government of Japan.