Emerging Bond Markets
The bond market is a key securities market and emerging economies present exciting, new investment opportunities. This timely book provides insights into these emerging bond markets through empirical models and analytical databases, i.e. Bloomberg, Eikon Refinitiv and the Russian Cbonds.
The book looks at the dynamics of the development of emerging bond markets, their competitiveness, features and patterns using macro and micro level data. It also takes into consideration various securities type i.e. government, corporate, sub-federal and municipal bonds, to identify respective challenges and risks. The book also analyses factors that may inhibit or stimulate a well-balanced financial market. It includes case studies of Asian, Latin American and Russian bond markets, as well as cross-country comparisons.
It will be a useful reference for anyone who is interested to learn more of the bond market and the modelling techniques for critical data analysis.
Tamara Teplova joined HSE (Moscow, Russia) in 1993. HSE is one of the top-300 universities in the world. Dr Teplova is the head of the master program Financial markets and institutions and the author of 11 papers in impact factor Scopus journals. She is the head of research projects initiated by government agencies and investment companies.
Tatiana V. Sokolova is a senior lecturer of HSE. Her research interest is financial economics. Dr Sokolova has published some papers in reputable Scopus journals. She is the co-author of two monographs on bond markets (in Rus.). She successfully participated in research projects initiated by the Ministries of the Russian Federation.
Qaiser Munir is a Professor and Director, Center for Business and Economic Research (CBER) at IBA Karachi, Pakistan. He is also a member of the Research Studies Evaluation and Review Committee, Ministry of Planning Development and Reform. Prior to joining IBA, he was associated with Universiti Malaysia Sabah (UMS) for ten years as a faculty member.
Routledge Studies in the Modern World Economy
Wealth, Inclusive Growth and Sustainability
Edited by Shunsuke Managi
The Korean Economy
From Growth to Maturity
You-il Lee and Richard Lee
North Korea and Economic Integration in East Asia
Yeongseop Rhee and Patrick Messerlin
Health and Education Reforms in Rural China
Li Li
With contributions from Haoming Liu, Yun Xiao and Liqiu Zhao
International Trade and Sustainable Development
Economic, Historical and Moral Arguments for Asymmetric Global Trade
Bob Milward
Ageing, Long-term Care Insurance and Healthcare Finance in Asia
Sabrina Ching Yuen Luk
What Made Koreas Rapid Growth Possible?
Jungho Yoo
Economic Growth, Inequality and Crony Capitalism
The Case of Brazil
Danilo Rocha Limoeiro
Emerging Bond Markets
Shedding Light on Trends and Patterns
Tamara Teplova, Tatiana V. Sokolova and Qaiser Munir
For more information about this series, please visit: www.routledge.com/Routledge-Studies-in-the-Modern-World-Economy/book-series/SE0432
Emerging Bond Markets
Shedding Light on Trends and Patterns
Tamara Teplova, Tatiana V. Sokolova and Qaiser Munir
First published 2020
by Routledge
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and by Routledge
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2020 Tamara Teplova, Tatiana V. Sokolova and Qaiser Munir
The right of Tamara Teplova, Tatiana V. Sokolova and Qaiser Munir to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.
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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
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ISBN: 978-0-367-50397-0 (hbk)
ISBN: 978-1-003-04981-4 (ebk)
Typeset in Galliard
by Newgen Publishing UK
Contents
PART 1
Trends and determinants of bond market development
PART 2
Pricing in bond markets
PART 3
If the default is tomorrow
PART 4
Forecasting the dynamics of the bond market
PART 5
ETFs and portfolio investment
PART 6
Anomalies in the bond markets
PART 7
Analytical and information databases: algorithms of work
The global economy is growing at a slower pace, the population is ageing, the stratification of the population by wealth and access to resources is growing, which leads to a drop in consumer demand. There are fewer breakthrough technologies and products on the market that could fundamentally spur consumer activity.
The analysis of situation during the global financial crisis of 20072008 (the subprime problem led to $3 tn of debt write-offs), the euro-debt crisis of 2010, and the subsequent recession of 20102011 in the global economy, shows that the initial problems were associated with the accumulation of imbalanced debt (by maturity, currency, income structure, etc.) in many developed and developing economies, especially at the household level and in the financial sector. The governments of the United States and a number of large countries had to take unprecedented measures in order to maintain financial and political stability. It would seem that the post-crisis period should be characterized by a significant easing of the debt burden, a revision of the borrowing policy, both at the level of governments and at the level of firms and households. However, statistics show the opposite. In this monograph we consider trends in the debt market through the prism of bonds.
We note three characteristic features of the global financial system by the beginning of 2020: 1) an ultra-soft monetary policy or a money helicopter by the central banks and governments of most countries and a high level of liquidity in the financial system; 2) the ongoing process of increasing debt, especially in emerging capital markets; 3) the risk of behaviour of major market agents.
In December 2019, the global debt reached the record levels of $256 tn ($182 tn in 2018), or 230% of the global GDP (IIF, according to the Institute of International Finance), the growth over 20 years was more than 3.2 times (in nominal dollar terms from $81 tn in 1999). Chinas total debt at the end of 2019 exceeded $40 tn (303% of domestic GDP). At near-zero rates, there is no catastrophe with debt growth. But the share of high-risk debts is high. In the monograph, we consider the features of the formation of the recovery rate in emerging markets, the determinants of defaults and the ability to reduce risks through portfolio building (ETFs).