Regional : Enhancing Association of Southeast Asian Nations Capital Market Integration
The main focus of the TA will be to continue supporting the members of the ASEAN Capital Markets Forum (ACMF) and the ASEAN Stock exchanges. This will be in the form of: (i) supporting members to complete selected initiatives in Implementation Plan; (ii) support selected members to complete integration requirement that enables wider participation in initiatives of the Implementation Plan; (iii) build capacities of regulators from Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV) in a structured manner; and (iv) support ACMF and the ASEAN Secretariat in planning for deeper integration post 2015 which may include revising the integration ASEAN Capital Market Scorecard to be more relevant and inclusive. The ultimate beneficiaries of the proposed TA will be the capital market regulators and stock exchanges of the ASEAN member countries.
Project Details
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Project Officer
Mohd Ismail, Mohd Sani
Southeast Asia Department
Request for information -
Country/Economy
Regional -
Modality
-
Sector
- Industry and trade
Project Name | Enhancing Association of Southeast Asian Nations Capital Market Integration | ||||
Project Number | 48143-001 | ||||
Country / Economy | Regional |
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Project Status | Closed | ||||
Project Type / Modality of Assistance | Technical Assistance |
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Source of Funding / Amount |
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Strategic Agendas | Inclusive economic growth Regional integration |
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Drivers of Change | Gender Equity and Mainstreaming Governance and capacity development Knowledge solutions Partnerships Private sector development |
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Sector / Subsector | Industry and trade / |
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Gender | Some gender elements | ||||
Description | The main focus of the TA will be to continue supporting the members of the ASEAN Capital Markets Forum (ACMF) and the ASEAN Stock exchanges. This will be in the form of: (i) supporting members to complete selected initiatives in Implementation Plan; (ii) support selected members to complete integration requirement that enables wider participation in initiatives of the Implementation Plan; (iii) build capacities of regulators from Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV) in a structured manner; and (iv) support ACMF and the ASEAN Secretariat in planning for deeper integration post 2015 which may include revising the integration ASEAN Capital Market Scorecard to be more relevant and inclusive. The ultimate beneficiaries of the proposed TA will be the capital market regulators and stock exchanges of the ASEAN member countries. Although the ASEAN Secretariat does not have the mandate not technical expertise on regional capital market integration, it is a member of ACMF meetings and plays an important role in coordinating the whole process including the ACMF Scorecard. While most components and outputs will be well defined and scoped out, some flexibility is also needed especially for activities post 2015. |
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Project Rationale and Linkage to Country/Regional Strategy | Capital market development and integration are inter-related. Both share the end objective of economic growth though they contribute in different ways. Integration provides avenue for efficient capital movement and cross border investments by removing barriers while development provides the framework and infrastructure to attract such investments. Capital market development contributes to economic growth in at least three distinct ways: (i) pooling and mobilizing resources for investment (surplus to deficit); (ii) good monitoring standards and corporate governance helps improve the efficiency with which firms allocate and utilize resources; and (iii) diversify and manage risk. According to Levine and Zervos, if a country had increased both stock market liquidity and bank development by one standard deviation, the country's real per capita GDP would have been almost 30% higher and productivity would have been almost 25% higher by the end of the 18-year sample period. Economic theory suggests that financial integration brings the following benefits: (i) lower costs of trading financial assets; (ii) more diverse investor portfolios; (iii) reduce information asymmetry; and (iv) more stable consumption patterns. Thus it is important for ASEAN capital markets to grow, develop and integrate. Regional capital market integration has also shown mixed results. On one hand, intra ASEAN portfolio investment has been increasing since the GFC and for the first time in 2010, total intra investment at $24.8 billion surpassed the total before the crisis. The represented growth of 47.8% which is the highest since 2007. However intra ASEAN equity investment as a percentage of total equity investment (which is an indicator of regional integration) has remained a flat line and only seen marginal improvement in 2010. In fact the percentage of total intra ASEAN investment of 11% in 2010 is still lower than the percentage pre crisis in 2006. So while total portfolio investments are increasing, more investments are flowing outside of ASEAN than within its member countries. The challenge therefore faced by ASEAN member countries is three-fold, first to develop their respective capital markets in a way that does not impede integration, second to complete integration initiatives based on the Implementation Plan more broadly with the involvement of more countries and third to strategize on deeper integration post 2015. All this requires better coordination between national capital market initiatives and the ASEAN regional agenda. |
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Impact | A deeper integrated ASEAN capital market |
Project Outcome | |
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Description of Outcome | Completed initiatives in Implementation Plan with wider participation of ASEAN members |
Progress Toward Outcome | |
Implementation Progress | |
Description of Project Outputs | Sustainable implementation of selected initiatives in Implementation Plan Completion of integration requirement that enables wider participation Improved capacities of CLMV regulators in a structured manner Defined process and initiatives for deeper integration post 2015 |
Status of Implementation Progress (Outputs, Activities, and Issues) | No objection received from ASEAN capital market regulators during the ACMF meeting on 2 September. Engagement of the various consultants will be begin based on priority of ACMF. The ASEAN Corporate Governance Conference and Award will be held in Manila on 14 November and partially supported by the TA. |
Geographical Location | Regional |
Summary of Environmental and Social Aspects | |
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Environmental Aspects | |
Involuntary Resettlement | |
Indigenous Peoples | |
Stakeholder Communication, Participation, and Consultation | |
During Project Design | This proposed TA builds upon outputs of the previous TA and should be seen as a continuation of ADB support ASEAN regional capital market integration. ADB's support in regional ASEAN capital market integration started in 2005 through the technical assistance on Supporting Enhance Cooperation Among Southeast Asian Equity Markets. ADB's TA in 2008 supported the development of the Implementation Plan which was an important milestone for ASEAN capital market integration. In 2010, ADB approved the TA on Promoting an Interlinked ASEAN capital market which began supporting ACMF members to implement specific initiatives of the Implementation Plan. That TA played an important role in several tangible outputs including: (i) the ASEAN corporate governance scorecard; (ii) ASEAN trading link between Malaysia, Singapore and Thailand ; and (iii) regulator to regulator training and secondment program. Although ADB's support in the cross border dispute resolution and enforcement mechanism although has not reached a conclusive point, it was catalytic in moving the process forward. Lessons learned from implementation of previous TAs including: (i) outputs should take into account realistic expectations of the capacities of the authorities; (ii) a more structured capacity building program for CLMV regulators based on best practices within ASEAN; and (iii) the importance of more robust engagement with private sector are incorporated. |
During Project Implementation | The implementation of TA 8905-REG was completed last 31 December 2018. ======================= September 2018 KPMG was engaged to do a corporate governance validation of top PLCs in the region. There is also an ongoing study to measure the level of corporate governance of publicly listed companies in the Philippines through the use of the ACGS index, among others. The results of the study will be used to help resolve issues regarding the benefits of good corporate governance practices and will provide inputs for members of the board of directors, compliance officers and corporate secretaries of publicly listed companies as well as for regulators, investors and other stakeholders TA implementation is on track and will close on 31 December 2018. ======================= The ASEAN Youth Regulator Program, or secondment opportunities in capital market regulators, was also rolled out under the ASEAN Market Development Plan. The program's objective is to foster mutual sharing and exchange of expertise and experiences among capital market regulators. The Malaysia Securities Commission (MAL SC) hosted the on-the-job training of regulators from Cambodia from July-October 2016. The Thailand Securities Commission hosted the secondment of the regulators from Lao PDR. Same activity is being planned this year for regulators from Lao Securities Commission Office who will work with MAL SC; and MAL SC's secondment to be hosted by the Monetary Authority of Singapore. The following experts were engaged under this TA: a Market Development Expert to design capacity building programs; a Stock Exchange Systems Expert to develop an optimal business model and a detailed road map for the successful integration of ASEAN securities markets; an IOSCO expert to assist the Philippines and the Lao PDR in their IOSCO applications; and a Media Expert and a Creative Design Expert.to develop a full corporate identity for the ASEAN Capital Market Forum. Resource persons to perform capacity building assessments for capital market regulators were also engaged. ======================= ADB has been providing technical assistance (TA) to promote ASEAN regional capital market integration. The support is to help the ASEAN Capital Market Forum (ACMF), consisting of the respective Chairs of ASEAN securities regulators , in priority areas such as ASEAN corporate governance, the integration of ASEAN stock exchanges, capacity building and the harmonization/mutual recognition of disclosure standards. In June 2015, ADB approved TA 8905: 'Enhancing Association of Southeast Asian Nations Capital Market Integration to continue supporting members of the ACMF and the ASEAN stock exchanges. Through the TA, ADB hosted the first ASEAN Corporate Governance Conference and Award in November 2015 to recognize the top 50 ASEAN publicly listed companies based on corporate governance disclosures. ADB also supports the ASEAN Market Development Program for capacity building of capital market regulators. In addition, ADB has engaged a legal expert to support Philippines and Lao PDR with their IOSCO application process. Finally, ADB engaged PwC to propose post trade solution for the ASEAN stock exchange linkage. ======================= The executing agency is ADB, managed by SERD in coordination with OREI. SEPF will lead implementation of TA with discussion and support from SERC especially where there is involvement of the ASEAN Secretariat. SEPF will also coordinate with OREI who is involved with ASEAN central banking integration to ensure a consistent approach overall. Members of ACMF and the ASEAN stock exchanges will be implementing agencies. ACMF will act as the coordinating body for all components. An implementation diagram is included in appendix 5. Proceeds of the TA will be disbursed in accordance with Technical Assistance Disbursement Handbook (2010 as amended from time to time). Estimated period of implementation is from 1 November 2014 to 31 October 2017. TA implementation will be monitored and evaluated through review missions especially attendance at ACMF and working group meetings, engagement with regulators and consultation with private sector associations. The ASEAN capital market scorecard will also be used as an important reference to reflect on completion of initiatives under the Implementation Plan. Finally desk research will be conducted analyzing data on regional integration. Lessons learned and best practices will be disseminated through workshops and international conferences. The TA will support publication of the ASEAN Corporate Governance Scorecard Reports which will highlight corporate governance best practices in ASEAN. |
Business Opportunities | |
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Consulting Services | The consultants will be engaged by ADB in accordance with the Guidelines on the Use of Consultants (2013, as amended from time to time). |
Responsible ADB Officer | Mohd Ismail, Mohd Sani |
Responsible ADB Department | Southeast Asia Department |
Responsible ADB Division | Public Management, Financial Sector and Trade Division, SERD |
Executing Agencies |
Asian Development Bank |
Timetable | |
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Concept Clearance | 22 Aug 2014 |
Fact Finding | 27 Oct 2014 to 30 Oct 2014 |
MRM | - |
Approval | 11 Jun 2015 |
Last Review Mission | - |
Last PDS Update | 28 Mar 2019 |
TA 8905-REG
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
11 Jun 2015 | - | 11 Jun 2015 | 31 Dec 2017 | 31 Dec 2018 | 15 May 2019 |
Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
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ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
Gov | Beneficiaries | Project Sponsor | Others | |||||
0.00 | 1,500,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,500,000.00 | 17 Jun 2022 | 1,394,324.10 |
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Title | Document Type | Document Date |
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Enhancing Association of Southeast Asian Nations Capital Market Integration: Technical Assistance Completion Report | TA Completion Reports | Sep 2020 |
Enhancing Association of Southeast Asian Nations Capital Market Integration: Technical Assistance Report | Technical Assistance Reports | Jun 2015 |
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
Title | Document Type | Document Date |
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Regional: Enhancing Association of Southeast Asian Nations Capital Market Integration | Validation of Technical Assistance Completion Reports | Apr 2021 |
Related Publications
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
Tenders
Tender Title | Type | Status | Posting Date | Deadline |
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Media Expert | Individual - Consulting | Closed | ||
Corporate Governance Validation Experts | Firm - Consulting | Closed | ||
International Corporate Governance Expert | Individual - Consulting | Closed |
Contracts Awarded
Contract Title | Approval Number | Contract Date | Contractor | Address | Executing Agency | Total Contract Amount (US$) | Contract Amount Financed by ADB (US$) |
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Capacity Development | Technical Assistance 8905 | 16 Apr 2018 | KPMG SERVICES PTE LTD(SINGAPORE) | 16 RAFFLES QUAY_#22-00 HONG LEONG BUILDI SINGAPORE 048581, SINGAPORE | Asian Development Bank | 159,240.00 | — |
Procurement Plan
None currently available.