Manila: The Asian Development Bank (ADB) announced its plans to mobilize up to $6 billion by 2030 to strengthen the capital markets in Southeast Asia, aiming to enhance the region's financial resilience against external shocks. The initiative intends to provide institutional support to capital market regulators throughout ASEAN to facilitate the development of robust domestic and regional markets.
According to Emirates News Agency, ADB President Masato Kanda emphasized the importance of deep capital markets in providing resilience to external shocks during the 13th ASEAN Finance Ministers and Central Bank Governors' Meeting. Despite significant growth, ASEAN's capital markets have yet to achieve the scale necessary to support the region's long-term development goals.
ADB's initiative will focus on strengthening local currency bond markets and increasing institutional investor participation, which is crucial in today's unpredictable global environment. Capital markets play a critical role in mobilizing private finance for infrastructure projects in sectors such as energy, transport, healthcare, and education.
The support package from ADB includes policy-based financing aimed at enhancing the domestic capital market environment and fostering regional integration. The bank will assist in strengthening regulatory frameworks, improving market infrastructure, and facilitating the issuance of sustainable finance instruments by companies and governments.
ADB also plans to translate policies into actionable transactions by investing in securities issued by regional companies. The initiative aims to encourage governments and private companies in ASEAN to issue more bonds for sustainable investments. The funds raised will support various infrastructure projects, including renewable energy, energy efficiency, sustainable transport, and affordable housing, promoting inclusive and resilient communities.
By stimulating greater bond issuance, ADB's $6 billion initiative is expected to unlock up to $30 billion in investments in ASEAN's capital markets by 2030. ADB will collaborate closely with the ASEAN Capital Markets Forum (ACMF), supporting the forum by hosting an ACMF office at its headquarters in Manila.