This report reviews recent developments in the corporate landscape, equity and debt capital markets, corporate governance, artificial intelligence (AI) in finance and sustainable finance trends across ASEAN economies. Drawing on comprehensive analysis of market practices and institutional frameworks in the region, it provides key policy considerations to effectively seize opportunities and address barriers to mobilising capital markets for sustainable growth in ASEAN. This report mainly covers Cambodia, Indonesia, Lao PDR, Malaysia, Philippines, Singapore, Thailand and Viet Nam.
Chapter 1 analyses the capital structure, profitability and productivity indicators for listed corporations in ASEAN countries. It also examines ASEAN companies’ use of public equity and bond markets alongside bank financing, secondary stock market liquidity, inclusion of ASEAN companies in global investment indices, the use of credit ratings in corporate bond markets and barriers to the development of corporate bond markets. It then proposes policy priorities to enhance the corporate sector’s access to financing via capital markets, to stimulate investment, innovation and growth.
Chapter 2 starts examining key features of corporate ownership structures in ASEAN countries. After a brief description of regional initiatives to develop an integrated regional capital market including the ASEAN Corporate Governance Scorecard, the chapter analyses corporate governance policies and practices in the region. The chapter concludes with a set of policy considerations relating to the corporate governance framework, to stimulate the development of ASEAN capital markets while accounting for the differing features of corporate structures in each country.
Chapter 3 explores potential benefits and risks of the use of AI in finance and presents trends in this area across ASEAN economies. Based on an original machine learning (ML) model it provides evidence of increasing interest around AI in finance in major Asian economies. Based on this analysis, it examines national AI strategies in selected ASEAN member states, presents major risks and challenges of AI applications in finance, and provides policy considerations to address these without stifling innovation.
Chapter 4 focuses on the key characteristics of and trends in sustainable bonds in Asia with a particular focus on ASEAN economies, including a breakdown of the different types of instruments such as green bonds and social bonds. It outlines how region-specific and global frameworks are implemented in different countries and examines how metrics underpin such bonds and support broader monitoring of sustainable finance activities across the financial sector in Asia. Finally, it provides policy considerations to support the development of sustainable bond markets in the region, which can contribute to sustainability objectives.
A draft version of this report was presented and discussed at the Committee on Financial Markets’ Roundtable on Capital Market and Financial Reform in Asia, jointly organised by the ADBI and the OECD with the financial support of the Government of Japan, on 14-15 March 2024 in Tokyo. The draft report was also discussed at the meeting of the Corporate Governance Committee on 8-9 April 2024.