Myanmar Government Bond Market

Development

Daw Thin Thin Su

Director
Debt Management Division
Treasury Department
Ministry of Planning and Finance
11-8-2018
 Presentation Outline

1. Key Milestones

2. Treasury Bills

3. Treasury Bonds

4. Challenges for Myanmar Bond Market Development

5. Myanmar Bond Market Association

2
 Key Milestones
28 January 2015 First 3-month Treasury Bill Auction

30 November 2015 Paper-based Treasury Bonds issuance ceased

5 January 2016 Treasury Bonds converted to Scripless
5 January 2016 Public Debt Management Law signed by the President
4 May 2016 First 6-month Treasury Bill Auction

15 June 2016 First 12-month Treasury Bill Auction

19 August 2016 Medium Term Debt Management Strategy for 2016 approved by Parliament
20 September 2016 First 2-year Treasury Bond Auction
2 November 2016 Foreign Banks began participating in the Treasury Bill Auctions
17 January 2017 Securities Companies began participating in the Treasury Bond Auctions
21 February 2017 Foreign Banks began participating in the Treasury Bond Auctions
1 June 2017 Government Annual Debt Report for 2015-16 approved by Parliament
28 June 2017 Medium Term Debt Management Strategy for 2017 approved by Parliament
15 August 2017 First 5-year Treasury Bond Auction
14 November 2017 First twin maturity Treasury Bonds issued
31 January 2018 Government Annual Debt Report for 2016-17 approved by Parliament

3 Investor Relations Program: Market Consultation is undertaken twice per year

 Treasury Bill Issuance

Treasury Bills Outstanding by Maturity

8,000

7,000

6,000

5,000
Kyat Billion

4,000

3,000

2,000

1,000

-
2014-2015 2015-2016 2016-2017 2017-2018 2018 (up to 31-7-
2018)

Offer Bid Allocated

4
5
0
1,500
2,000
2,500
3,000

1,000

500
30-Jan-15
30-Mar-15
30-May-15
30-Jul-15
30-Sep-15
30-Nov-15
31-Jan-16
31-Mar-16

3-months
31-May-16
31-Jul-16
30-Sep-16

6-months
30-Nov-16
31-Jan-17
31-Mar-17
31-May-17

12-months
31-Jul-17
30-Sep-17
Treasury Bills Outstanding (Kyat billion)

30-Nov-17
31-Jan-18
31-Mar-18
31-May-18
31-Jul-18
1,500
2,000
2,500
3,000

0
1,000

500

Jan 2015
Mar 2015
May 2015
Jul 2015
Sep 2015
Nov 2015
Jan 2016
Treasury Bills

Mar 2016
May 2016
Jul 2016
Sep 2016
Nov 2016
Jan 2017
Mar 2017
May 2017
Jul 2017
Sep 2017
Nov 2017
Treasury Bills Outstanding (Kyat billion)

Jan 2018
Mar 2018
May 2018
Jul 2018
6
Percent
10.0%

3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
30-Jan-15
30-Mar-15
30-May-15
30-Jul-15
30-Sep-15
30-Nov-15
31-Jan-16
31-Mar-16
31-May-16
31-Jul-16
30-Sep-16
30-Nov-16
31-Jan-17
31-Mar-17
31-May-17
31-Jul-17
30-Sep-17
Treasury Bill Issuance Yields

30-Nov-17
Treasury Bills

31-Jan-18
31-Mar-18
31-May-18
31-Jul-18
3-months
6-months
12-months
 Treasury Bond Issuance
Treasury Bonds Outstanding by Maturity
3,500

3,000

2,500
Kyat Billion

2,000

1,500

1,000

500

-
2016-2017 2017-2018 2018 (up to 31-7-2018)

Offer Bid Allocated

7
 Treasury Bonds
Treasury Bonds Outstanding Treasury Bonds Outstanding
(Kyat billion) (Kyat billion)
4,000 4,000

3,500 3,500

3,000
3,000

2,500
2,500
2,000
2,000
1,500

1,500
1,000

500 1,000

0 500

0
Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul
2 to 3-years 5-years 2016 2016 2017 2017 2017 2017 2017 2017 2018 2018 2018 2018

8
9
8.0%
8.5%
9.0%
10.0%
10.5%
11.0%

9.5%
20-Sep-16
20-Oct-16
20-Nov-16
20-Dec-16
20-Jan-17
20-Feb-17
20-Mar-17
20-Apr-17
20-May-17
20-Jun-17
20-Jul-17
20-Aug-17
20-Sep-17
20-Oct-17
20-Nov-17
20-Dec-17
20-Jan-18
20-Feb-18
20-Mar-18
Treasury Bond Issuance Yields

20-Apr-18
20-May-18
20-Jun-18
Treasury Bonds

20-Jul-18
5-years
2 to 3-years
 Scripless Treasury Bond (Benchmarks)
As at 31 July 2018
Kyat billion

Coupon 15/11/2018 15/5/2019 15/11/2019 15/5/2020 15/11/2020 15/5/2021 15/11/2021 15/5/2022 15/11/2022 15/5/2023 15/11/2023

9.00 300.800 4.500

9.25 719.670

9.50 447.820 118.400 213.100 834.980 126.770 1,016.450 159.160 776.810 40.840

Total 748.620 842.570 213.100 834.980 126.770 1,016.450 159.160 776.810 40.840

4,759.300

10
 Challenges for Bond Market

 Need more participants in the auctions

 Need to broaden the investor base further
 Need to implement an auction bidding system
 Need to issue securities regulations
 Need to raise awareness and educate investors
 Need to develop the secondary market
 Need to develop a Bond Market Development Master Plan
 Need to develop the repo market
 Need to consider retail investors
 Need to create a Bond Market Association

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 Myanmar Bond Market Association
 DMD would like to hear the experiences of the Thai and
Vietnam Bond Market Associations in establishing their
respective Associations
 DMD would like to know how the Associations have
assisted in developing their country’s Bond Market?
 Who took the lead to establish their respective
Associations and which institutions were involved?
 What was the timeline to establish and have a fully
operational Association?

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 Thank you!

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