A research submitted in partial fulfilment of the requirement for the degree of Master of Business Administration.

Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1995

Human beings have progressed and developed because of the ability to adapt to his changing environment by successfully innovating its surroundings. Similarly we see a spurt of innovations whenever there are changes in the financial environment. The reasons for these innovations specially in the emerging markets have been country specific depending on the level of economic growth, financial regulations and other factors. Hence the objective of the research was to study the innovations in the Bond markets of South East Asia by taking examples and cases from countries of Thailand and Malaysia due to which one can know the changes that will take place and the future trends, as the Bond markets will be an important part of the financial system and development process of South East Asia. In totality the report say's that the innovations in Bond markets of South East Asia are modifications of existing products and process and are country specific but the foundations has always been changes in regulations. In Thailand and Malaysia the innovations were regulation based and came about due to competition, changes in Technology, and globalisation. The most important process/ product that has started the ball rolling in Thai-financial markets is the 'ATM'. Automatic teller machine and in Malay-financial market is the 'Cagamas Bonds'. These innovations are true innovations in the sense that they have been able to make the market more complete by taking care of the need of convenience for customers. The future for innovations in the Emerging Bond markets are bright and some of the trends that the report brings out are: Large number of small issuers, Financial jointventures, and Economies of scope in Bond issuance.