Lawmaker wants local bond market to be less institutional

Lawmaker Ip Sio Kai wants the local bond market to be less institutional and more open to the general public and specific investors, he said yesterday in an inquiry to the government delivered to the Legislative Assembly (AL).

Ip, who has ties to the banking and finance sector, called on the Secretary for Economy and Finance, Lei Wai Nong, to make an extra effort to develop the local financial sector through a more robust bond market.

The lawmaker suggested the government attract local companies to issue bonds and other financial products in Macau. He also called on the government to issue debt securities as a way to finance major construction projects and other development plans.

In response, Lei said, “At the moment we do not do this, but we have not excluded the possibility in the future to issue government bonds to boost financial development,” he said. However, he noted  a need to draft laws and regulations should this eventuate.

The Secretary said that at this stage, the approach is to incentivize companies that typically issue such financial instruments outside of Macau to issue these products within Macau, particularly if they already have operations within the region.

Ip noted that the gaming concessionaires often use debt securities for financing, but these are usually issued in other markets such as Hong Kong and abroad and not in Macau. He stated, “We should be able to attract them to issue them in Macau.”

While agreeing with the concept, Lei also said that the local government does not currently have a need for such financial products, due to sufficient reserves. He also noted the absence of legal frameworks for other public entities to participate in such a market, as it involves public funds.

Lei said that for the time being, the role of Macau would be to promote the issuance of such products at national and provincial levels. However, he stated that the government would make further efforts to advance in this field in the coming year to establish closer ties with the international markets.