‘BOND MART CONTINUES TO BE VIBRANT’
Secondary market seeing average daily trading volume of RM5.4b, say regulators
THE bond market continues to be vibrant, with a deep secondary market having an average daily trading volume of RM5.4 billion year-to-date compared with the past three-year average of RM3.6 billion.
Bank Negara Malaysia and the Securities Commission (SC) said in a joint statement liquidity in the foreign exchange (forex) market had recorded a sustainable average daily trading volume of US$12 billion (RM49.5 billion).
Of this, the forex swap and forward market accounted for close to half of the average volume, they added.
“The increase in dynamic hedging activities by global institutional investors has improved market access and further contributed to the liquidity in the forex forward market,” they said in the statement after their annual bilateral meeting yesterday.
Bank Negara and the SC’s 16th bilateral meeting was to advance discussions on areas of mutual interest between both authorities, including sustainability initiatives, digital asset regulations and resilience of the financial markets.
The authorities discussed initiatives
relating to the sustainability agenda, particularly on the SC’s Sustainable and Responsible Investment Framework (SRI) and Bank Negara’s ValueBased Intermediation Strategy (VBI).
Given the alignment between SRI and VBI, both regulators agreed to embark on a joint research study to develop a clear taxonomy on sustainable economic activities starting with fundraising and lending practices.
Another area being looked at involves understanding the transmission of climate and environmental-related risks to the financial system and economy, and the feedback loop.
The initiative is an expansion of ongoing collaboration between the authorities in areas of national strategic interest especially in Islamic finance.
In relation to digital asset regulations, both authorities have entered into coordinating arrangements which will facilitate industry innovation, fundraising activities for early-stage companies and trading of digital assets.
The arrangement will also support the oversight of digital asset activities and ensure that systemic risk and financial integrity measures remain effective.