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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.
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The Association of Southeast Asian Nations (ASEAN) is one of the most dynamic and fastest growing regions in the world. In the last two decades, the region’s real gross domestic product (GDP) has grown by 5% annually and its GDP reached USD 3.7 trillion in 2023, equivalent to 3.6% of the world’s GDP. As a group, ASEAN economies were the fifth largest economy globally in 2023, up from eleventh in 2000.
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This chapter describes the current corporate landscape in ASEAN economies, provides trends in the use of equity and corporate bonds markets and discusses issues related to capital market development that deserve special consideration. It starts by describing the current use of market-based financing versus bank financing in the region and provides an overview of the current marketplaces for equity and corporate bonds in ASEAN economies. It follows by providing a characterisation of the corporate sector with respect to its capital structure, profitability and investment, and describes the trends in the use of equity and corporate bond markets. The chapter also discusses selected issues related to the development of capital markets in the region and policy considerations that deserve attention from ASEAN authorities.
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This chapter describes corporate governance policies and practices in ASEAN jurisdictions to mobilise their capital markets, in alignment with the G20/OECD Principles of Corporate Governance. The first section discusses ownership structures in the region, and also describes regional initiatives to develop an integrated regional capital market, including the ASEAN Corporate Governance Scorecard. The second section discusses corporate governance policies and practices in ASEAN economies and their relevance for promoting corporate access to capital market financing, including with respect to company groups, institutional investors and stewardship, corporate sustainability, general shareholder meetings, and the responsibilities of the board. The final section discusses policy considerations.
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Advances in artificial intelligence (AI) models, including the advent of models offering content generative capabilities and user-friendly interfaces, have increased interest around AI innovation by the general public in Asia and globally. Although the deployment of fully automated generative AI tools in finance is slow-paced, the wider deployment of AI in finance could amplify risks already present in financial markets and give rise to new challenges. This chapter provides a sentiment analysis of interest in AI innovations in finance in major Asian economies using Machine Learning (ML) techniques; presents recent developments in AI in finance and the potential use cases and associated benefits of such tools for ASEAN member states, analyses potential risks from a wider use of such tools in ASEAN financial markets; examines policy developments and discusses associated policy implications.
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Forms of sustainable finance have grown rapidly in recent years in Asia. These practices encompass instruments for issuers, third-party ratings, principles and guidance, as well as index and portfolio products to help channel financing to transitioning entities, and also to better price the risks and benefits of the green transition. This chapter provides an overview of the trends in corporate sustainable bonds in Asia with a specific focus on ASEAN economies and outlines relevant standards that have been developed. Further, it describes how key performance indicators (KPIs) and metrics underpin such bonds and support a broader monitoring of sustainable finance activities across the financial sector. It also presents policy considerations to support authorities’ efforts in the region.
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In this report ASEAN, as a region, includes the following eight jurisdictions: Cambodia, Indonesia, Lao PDR, Malaysia, the Philippines, Singapore, Thailand and Viet Nam. Asia, as a region, includes the following 18 jurisdictions: Bangladesh, Cambodia, People’s Republic of China, Hong Kong (China), India, Indonesia, Japan, Korea, Lao PDR, Malaysia, Mongolia, Pakistan, Philippines, Singapore, Sri Lanka, Chinese Taipei, Thailand and Viet Nam.