KUALA LUMPUR: The Securities Commission (SC) believes that the integration of Asean capital markets will allow it to “stand as a stronger force”.
SC chairman Datuk Mohammad Faiz Azmi noted that plenty of discussions in the past have revolved around the integration of Asean markets. According to him, while still in early stage discussions, it is a timely effort and needs to happen.
He said one of the aspirations he has for this integration includes an Asean bond market.
“The Asean bond market comes from a problem – the large sums of money being discussed for infrastructure like the Asean Power Grid are huge. One of my concerns is whether our market can take that level of funding needed,” he told reporters on the sidelines of the Asean Capital Markets Forum (ACMF) here yesterday.
Explaining further, Mohammad Faiz said he was recently speaking to a company that was considering de-listing and going elsewhere.
When asked why, the reasoning was the company was not able to raise the kind of funds needed, hence by listing in another jurisdiction, there would be access to a bigger pool of funds. The issue of funding also pertained to not only the infrastructure, but also disasters like floods and droughts.
“So my next question is, when a flood happens, how is the government or states going to pay for this? If we look at the climactic maps, it is quite clear that some areas are going to be affected worse than the rest,” he said.
He reiterated the need for adaptation, and how to survive natural disasters that will occur, simply because the region is located in a climate vulnerable part of the world.
He added for South-East Asia alone, it has been estimated that US$210bil in funding is needed annually for green and climate-compatible infrastructure.
“Funding for mitigation and adaptation projects also deserves equal focus. The opportunities for innovative market-based financing are significant, but financing gaps persist due to the complexity of projects and perceived unattractive commercial returns,” he said.
To address that, he said ACMF’s mitigation co-benefit and Adaptation for Resilience Guide aims to close this gap by directing capital to the right places.
“This is an area where policy support and strong public-private partnerships will be crucial,” he said. He also noted that carbon markets and the trading of carbon credits were another enabler.
