Professional Documents
Culture Documents
Korea’’ss Development
Development Experience
Experience :: KTB
KTB Market
Market
November 2009
Republic of Korea
0
Content
% of GDP
(trn Won) (trn Won)
300 30% 90 85.6
283.0
25.3%
24.4% 80
250 239.3 25%
70
206.8 60.7
200 20% 60 56
52.1
15.8%
50
150 15%
123.1 40
8.1%
100 10% 30
7.4%
19.4
55.6 20 15.2
3.9%
42.6 12.5
50 5%
18.8 10
0 0% 0
2009(e)
2009(e)
1998
2000
2002
2004
2006
2008
1998
2000
2002
2004
2006
2008
2
* 283.0 trillion won Æ around 210 billion US dollars (taking into account the average exchange rate in the first half of the 2009)
. Overview of KTB Market (Con’td)
1400
20
1200
1056.9
800
600 10
361
400
213.5 5
200
13.3
0 0
2009(e)
1998
2000
2002
2004
2006
2008
Philippines
Hongkong
Indonesia
Korea
Malaysia
Singapore
Japan
Thailand
3
* Source : ADB, Asian Bonds Online, as of mid-2008
Ⅰ. Overview of KTB Market
Ⅱ. Factors of KTB Market Development
1. Well-organized & systemized primary market
2. Constant efforts for boosting liquidity
3. Fostering KRX Trading System (KTS) for KTB
4. Expanding investors’ base
5. Communication with market participants
[Appendix 1] Recent trend of interest rates
[Appendix 2] Recent history of KTB market
4
Ⅱ. Factors of KTB Market Growth
Predictability
&
Transparency
KTB
Openness
& Efficiency
Communication
5
Ⅱ. Factors of KTB Market Growth (Con’td)
1. Well-organized & systemized primary market
Regular announcement of annual & monthly issuance plan
Annual plan (at the beginning of the year)
Gross (and net) issue volume of the year / Composition by maturity
Regular auctions
3-yr KTB : Monday in 1st week / 5-yr KTB : Monday in 2nd week
10-yr KTB : Monday in 3rd week / 20-yr KTB : Monday in 4th week
Well-functioning Primary Dealership Program
Off-the-run KTBs of low liquidity exchanged for benchmark KTBs of high liquidity
3 conversion offers in 2009
* bid-to-cover ratio : 338%(May), 227%(Jul), 234%(Sept)
7
Ⅱ. Factors of KTB Market Growth (Con’td)
At the beginning of the KTB market, its transparency & price credibility were at
a low level due to a lack of information sharing & a shortage of infrastructure
8
Ⅱ. Factors of KTB Market Growth (Con’td)
4. Expanding investors’ base
Investment 35 12%
Comp,
ETC, 1.3% 9.9%
4.8% 30 9.2%
Securities, 10%
7.2%
25 7.4%
7.1% 8%
Insurance, Bank, 6.6% 6.5%
15.5% 43.4% 20
6%
15
4%
10 2.8%
2.0%
2%
Pension 5
Fund,
29.0% As of Dec 2008 0 0%
4Q06 2Q07 4Q07 2Q08 4Q08 1Q09 2Q09 3Q09
9
Ⅱ. Factors of KTB Market Growth (Con’td)
Overseas IR
-’08.11 Singapore
-’09.6 Singapore, Japan
& US
-’09.9 Hong Kong
10
Appendix 1] Recent trend of interest rates
9
(%) 3yr KTB 5yr KTB 3yr coporate(AA-) Base rate
8
1
02-Jan-07 02-May-07 02-Sep-07 02-Jan-08 02-May-08 02-Sep-08 02-Jan-09 02-May-09 02-Sep-09
11
[Appendix 1] Recent trend of interest rates (Cont’d)
7%
Sep.30.2008
Dec.31.2007
6% Aug.31.2009
5%
4%
3-yr 5-yr 10-yr 20-yr
12
Appendix 2] Recent History of KTB market
13
Thank You
14