Financial literacy seen as challenge for bond markets

The National Business

FINANCIAL literacy is one of the major challenges of the bond markets in the country, says Bank of PNG assistant governor Joseph Teria.
The bond markets – also called the debt markets or credit markets – is a financial market in which the participants are provided with the issuance and trading of debt securities.
The bond market primarily includes government-issued securities and corporate debt securities, facilitating the transfer of capital from
savers to the issuers or organisations requiring capital for government projects, business expansions and ongoing operations.
“The current bond market that is existing in the country is the government bond market.” Teria said.
He said a lot of awareness was needed to educate the
people on the investment process and having access to financial services even from the basics like having a savings account.
Speaking during the workshop on capital markets in PNG hosted by the Japan International Corporation (Jica) yesterday, Teria said another challenge was financial regulation and legislation of the bond market.
“We need to update some of the legislations if we are going to develop the capital market,” he said. “I understand the Securities Commission is taking the lead in this but I’m asking everyone to work together and make it a reality.” He said other challenges were:

  • Financial integration and connectivity;
  • Encumbrance in payment and settlement channels;
  • Customer registry;
  • Increased participation in offshore markets; only few participate because not widely understood the process; and
  • Market infrastructure.