Asia Financial Services

Access to financing in Myanmar has been traditionally limited to an elite stratum of companies closely linked to the government, with smaller businesses turning to family and friends for raising funds. However, this is set to change, with a new bourse, to be known as the Yangon Stock Exchange (YSE), under development.

Like bourses in many other emerging markets, the Indonesia Stock Exchange (IDX) has been on a downward trend since late May, as the US Federal Reserve has made clear that it will scale back its stimulus programme. However, authorities have taken steps to strengthen the market, including propping up the rupiah, and many of the IPOs scheduled for the coming months appear to be on track, suggesting that any difficulties could be short-lived.

Return of confidence after Malaysia’s general election has seen a surge in companies declaring their intention to go public, with more than $2bn worth of initial public offerings (IPOs) launched or mooted for the weeks following the poll.

With Malaysia’s economy expected to post growth of just above 5% in 2013, investors expect further increases in lending to the private sector. While rising household debt remains a concern in the medium term, domestic bank capitalisation leaves some room for further growth in their portfolios.

With interest rates in developed countries at record lows, many investors are looking for better returns in emerging markets, including Malaysia, where sound macroeconomic fundamentals and attractive yields are driving demand for sovereign debt. The May 5 re-election of the business-friendly Barisan Nasional (BN) party is likely to raise further the profile of South-east Asia’s largest bond market.

The rapid evolution of mobile technology across Papua New Guinea (PNG) is proving to be a key driver for banks as they step up their efforts to seek out growth in rural areas. Banks’ moves to shift their focus from urban centres to rural areas sits well with the government’s financial inclusion policies, although lenders are likely to face a number of challenges as they look to expand in what remains a predominantly cash-based economy.