Infrastructure Finance
  • Q1 2019 Green Bond market update

    Source: Monica Filkova, Alan Gordon, Camille Frandon-Martinez
    Date Submitted: 28 Jun 2019
    Views: 1024
    Downloads: 21
    Green bond issuance reached USD47.9bn in Q1 2019, and surpassed Q1 2018 volume of USD33.8bn by 42%, on a clear upward trend, driven by non-financial corporates, which accounted for a third of issuance. 

    This report qualifies for 0.5 CE under the guidelines of the CFA Institute Continuing Education Program. 
    We encourage CFA Institute members to login to the CE tracking tool to self-document these credits
  • Financing low-carbon buildings and energy efficiency in the green bond market

    Source: Climate Bonds Initiative
    Date Submitted: 03 Apr 2019
    Views: 1070
    Downloads: 14
    This report explores how the green bond market can be accessed to finance low-carbon buildings and energy efficiency upgrades, through issuance from property companies, financial institutions, local governments, and securitisation. 
  • Green bonds: The state of the market 2018

    Source: Climate Bonds Initiative
    Date Submitted: 07 May 2019
    Views: 2844
    Downloads: 107
    The new annual report focuses on labelled green bonds and uncovers the latest developments in this asset type on a global scale. It looks at trends in green bond issuance and identifies avenues for market growth. 

    This article qualifies for 0.5 CE under the guidelines of the CFA Institute Continuing Education Program. 
    We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. 
  • Leading viewpoint: 2019's green investment picture

    Source: Sean Kidney
    Date Submitted: 18 Feb 2019
    Views: 322
    Downloads: 20
    Lack of standards is not hindering green bond issuance, while pressure on corporations to finance the energy transition intensifies, argues Sean Kidney, CEO of Climate Bonds Initiative.
  • ASEAN green financial instrument guide

    Source: Climate Bonds Initiative
    Date Submitted: 18 Apr 2019
    Views: 1844
    Downloads: 94
    Several financial instruments and mechanisms are available for public and private entities in ASEAN that look to fund green assets through equity, debt and partnerships. This step-by-step guide gives an overview of the financing process and its implementation.

    This article qualifies for 0.5 CE under the guidelines of the CFA Institute Continuing Education Program. 
    We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. 
  • ASEAN green finance: State of the market 2018

    Source: Climate Bonds Initiative
    Date Submitted: 18 Apr 2019
    Views: 1045
    Downloads: 70
    This report examines the progress that has been made and the opportunities lying ahead for green bonds in ASEAN countries. It looks at regional themes in green bond markets and issuance from companies that operate in climate-aligned sectors.

    This article qualifies for 0.5 CE under the guidelines of the CFA Institute Continuing Education Program. 
    We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. 
  • The race for relevance - technology opportunities for the finance function

    Source: Clive Webb
    Date Submitted: 18 Apr 2019
    Views: 1233
    Downloads: 36
    Technological advances provide finance functions with significant opportunities to play a valued role in maximizing the organization’s strategic ambitions. 

    Six key technologies include: 

    • Robotic Process Automation 
    • Analytics 
    • Cloud computing 
    • Cyber 
    • Artificial Intelligence 
    • Social

    This article qualifies for 1 CE under the guidelines of the CFA Institute Continuing Education Program. 
    We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. 
  • The growth of sidecar joint ventures in aviation

    Source: David Yu
    Date Submitted: 29 Oct 2018
    Views: 319
    Downloads: 13
    As new capital looks to enter the aircraft leasing business, sidecar arrangements allow investors to benefit from experience and expertise of established lessors, who in return gain access to more opportunities.
  • Drivers and policies affecting China's cross-border investment and financing in aviation

    Source: David Yu
    Date Submitted: 24 Oct 2018
    Views: 328
    Downloads: 20
    Chinese outbound M&A deals have grown exponentially over the past five years. 
    Aviation, including airports, leasing and technology, as well as tourism are favoured industries that are promoted because of policy considerations and strong underlying stability and economics. 
  • Policy uncertainty and stock liquidity [UniSA 2018]

    Source: My Nguyen, Huu Nhan Duong, Chandrasekhar Krishnamurti, Justin Hung Nguyen, S. Ghon Rhee
    Date Submitted: 21 Nov 2018
    Views: 1787
    Downloads: 31
    Policy uncertainty has a strong negative effect on stock market liquidity, as investors hold back on trading risk-sensitive securities during periods of uncertainty. The paper explores three factors affecting liquidity: information asymmetry, cash flow risk and funding constraints. 

    This paper has been submitted to the conference Politics, Stock Markets and the Economy, held at the Centre of Applied Finance and Economics, University of South Australia Business School on 4-5 December 2018.
  • Changing geography of aviation finance funding

    Source: David Yu
    Date Submitted: 22 Oct 2018
    Views: 373
    Downloads: 24
    New players in the aircraft leasing business, such as commercial banks and insurance companies are adding to the geographic diversity of funding sources. This paper analyses new trends and the roles of the newcomers in the sector.
  • CFAM-FDU - Initial coin offerings and platform building

    Source: Jiasun Li, William Mann
    Date Submitted: 07 Oct 2018
    Views: 1256
    Downloads: 52
    As initial coin offerings (ICOs) explode in popularity in the startup world, they are surrounded by controversy. The response of market practitioners and regulators has varied, from enthusiasm to outright bans. Li and Mann offer an economic analysis of the role of ICOs in development of platforms. They analyze economic efficiency to pinpoint when token sales create value. Their findings have implications for regulators and practitioners in the booming ICO market.
  • ​Presentation Deck of Seminar - ''Financing Infrastructure in Asia and the Pacific: Capturing Impacts and New Sources''

    Source: Naoyuki Yoshino, Matthias Helble, Umid Abidhadjaev
    Date Submitted: 16 Apr 2018
    Views: 3016
    Downloads: 99
    Presentation deck of seminars - Financing Infrastructure in Asia and the Pacific: Capturing Impacts and New Sources.
    Governments throughout the Asia-Pacific region recognize the catalyzing role of infrastructure investment for sustainable growth. Yet, they are faced with the problem of financing new infrastructure.
    To explore on possible solutions, CFA Institute Asia-Pacific Research Exchange and the Asian Development Bank Institute (ADBI) co-organized two seminars in Hong Kong and Singapore with subject matter experts highlighting the infrastructure needs in Asia, introducing different sources of financing infrastructure and latest evidence on the impact of infrastructure investment on economic and social indicators.
    The presentation deck of Asian Development Bank Institute can be downloaded in the attached.
  • Financing Infrastructure in Asia and the Pacific - Capturing Impacts and New Sources

    Source: Naoyuki Yoshino, Matthias Helble, Umid Abidhadjaev
    Date Submitted: 06 Apr 2018
    Views: 5386
    Downloads: 0
    Financing Infrastructure in Asia and the Pacific - Capturing Impacts and New Sources
  • AsianFA Economic Depreciation in the Property Value: Cross-Sectional Variations and Their Implications on Investments

    Source: Jiro Yoshida,
    Date Submitted: 02 Apr 2018
    Views: 351
    Downloads: 9
    CFA Institute Asia-Pacific Research Exchange Best Paper Award:
    I would like my accepted AsianFA paper considered for the CFA Institute Asia-Pacific Research Exchange Award, 
  • Green Bond: A Socially Responsible Investment (SRI) Instrument 

    Source: Pradiptarathi Panda
    Date Submitted: 17 Feb 2018
    Views: 388
    Downloads: 18
    Green Bond attracts a specific group of investors and helps issuers as well as to the economy at large. This innovative financial instrument was issued in the year 2008 by World Bank with the request of investors. Now this instrument is gaining popularity world-wide. So far World Bank has made 130 issues in 18 currencies in totaling of US$5.7 billion.  Followed by World Bank, there are several institutions, which are issuing this instrument. The present study aims to state the genesis of Green Bond, its inception and the road ahead so far with current statistics
  • Making Infrastructure Finance Sustainable in Asia

    Source: Dr. Naoyuki Yoshino
    Date Submitted: 27 Dec 2017
    Views: 2083
    Downloads: 72
    This article is published on Asia Asset Management December 2017/ January 2018 issue. 

    Infrastructure development is the route to Asia’s future and the scale of investment required is staggering. Asian Development Bank believes emerging economies across the region will need as much as US$26 trillion to build everything from transport networks to clean water systems through 2030. 

    Government agencies across the region are promising major spending on public works. But with limited public funds available, a critical question remains: how can governments entice more private investment? The answer is to create a sustainable model that returns part of the tax revenue to the private sector; a concept known as the “spillover” effect.

    It’s easy to visualize how good infrastructure creates tangible spillover effects for the community – for example, railways bring more manufacturing into regions, which results in more jobs and spending. Corporate, income, sales, and property taxes then rise as a consequence.

    However, the spillover for private investors is usually low and downside risks are plentiful: a project may be halted due to political leadership changes; delays in land acquisition can hike interest expenses; or lengthy planning and permitting processes can slow projects ready for investment. In most cases, the stream of revenue (for example, the toll on a new highway) is set low, which depresses the investment rate of return.

    Maximsing returns

    To change this, Asian Development Bank Institute has embarked on intensive research and discussions with governments around the region to help them understand how the spillover effect is key to long-term infrastructure development. We studied the economic impact of dozens of projects and used advanced analytics to compute the effect of spillover on tax revenues - including a cross border arterial road project in Manila; a railway project in Uzbekistan; and a high-speed bullet train project in Japan.

    Private investors can participate in an infrastructure project through buying revenue bonds, a type of municipal bond that finances income-generating projects. The revenue bond, in this case, will consist of user charges (e.g., road tolls) plus part of tax revenues collected.
    Infrastructure development becomes attractive where spillover effects are large. Importantly, the projects also attract the right kind of investors, such as pension funds and insurance firms, who have a long-term investment horizon. 
    Regional considerations

    What’s important for governments and the private sector to consider is that infrastructure projects impact regions in different ways. In Japan’s Nagoya City, a hub for Japanese manufacturing industries, industrial plants and road projects generate high returns. However, expecting similar projects on, for example, the northern island of Hokkaido where tourism is the key industry, is unreasonable. An industrial region requires reliable roads, railways and ports; whereas tourism looks for airport, hotels, and recreational infrastructure.

    No discussion of infrastructure in Asia would be complete without mentioning China’s One Belt, One Road initiative. To succeed, each project needs to be assessed based on the region where it will be built. A railway project in Bangladesh, for example, will generate a different set of spillover effects one built in Pakistan. 

    Importance of connectivity

    The spillover effect is also impacted by connectivity, which is bolstered by returns from infrastructure development. A railway that eventually connects to bigger and busier cities generates significantly more revenue compared to a rail line with limited connectivity. Under China’s plan to revive trade along an ancient Silk route, the benefits of development could spread across countries in Asia and Europe. 

    Thinking differently about how roads, power and bridges are financed and operated can substantially improve a region’s infrastructure without necessarily imposing further burden on an already stressed local government budget. By bolstering private investment returns with spillover effects, governments can attract more long-term private capital, boost investments and increase regional economic activity. 
  • AFM - Order Exposure in High Frequency Markets

    Source: Bidisha Chakrabarty, Terrence Hendershott, Samarpa Nawn, Roberto Pascual
    Date Submitted: 26 Nov 2017
    Views: 487
    Downloads: 3
    Theory predicts that uninformed traders hide limit orders to avoid free-option risk while informed traders hide to delay information revelation. Evidence from non-high frequency markets supports the free-option narrative. We advance the study of order exposure to high frequency markets. Using detailed data that identify hidden order placement by high-frequency traders (HFTs) vis-à-vis other algorithmic and non-algorithmic traders, we find that HFTs use small share sizes to hide orders near the best quotes. HFTs’ hidden orders have shorter time to completion, higher fill rates, lower implementation shortfall, and overall lower information content. Collectively our results show that extant models do not explain the order exposure choice of HFTs and calls for new theory. In that direction, we test and find that compared to other trader groups, HFTs’ aggressive hidden limit orders more often undercut standing orders at or near the best quotes.
  • 东盟概念股将从中国一带一路倡议中获益

    Source: 新交所
    Date Submitted: 08 Oct 2017
    Views: 667
    Downloads: 0
    • 凭借毗邻中国的地理优势以及相对较低的风险水平,预计东盟将是一带一路倡议的主要受益者及桥头堡,该地区将有更多的基础设施的建设和改造项目,而贸易活动及地区联系也会更加紧密。
    • 作为东盟成员国,新加坡将通过其金融中心地位在一带一路倡议中发挥重要作用。此外,新加坡还具备成熟的产业,并有着专业经验可推动并支持一带一路倡议在东盟地区的基础建设项目。
    在新交所 GICS® 工业、材料和公用事业板块中,192 只股票(约占总市值的 25%)有至少 20% 的收入来自东盟地区。其中20 只市值最大的股票中,有 13 只年初至今录得上涨。表现最好的五只股票是怡和策略 (Jardine Strategic, +25.5%)、海峡贸易公司 (Straits Trading, +25.1%)、立合斯顿控股 (Riverstone Holdings, +18.7%)、新捷运 (SBS Transit, +17.9%) 和吉宝基础设施信托 (Keppel Infrastructure Trust, +16.8%)。
  • Attract Private Financing to Infrastructure Investment by Injecting Spillover Tax Revenues

    Source: Naoyuki Yoshino, Masaki Nakahigashi, Victor Pontines
    Date Submitted: 14 Sep 2017
    Views: 1421
    Downloads: 58
    The below article was published on Nomura Journal of Asian Capital Markets Spring 2017 Vol.1/No.2
    This article covers the following with statistics:
    - Need for Infrastructure Investment 
    - Economic Effects of Infrastructure Investment 
    - Infrastructure Financing through Private Funds 
    - Public-Private Cooperation in High-Risk Projects: Viability Gap Funding
    - Increased Rate of Return through Internalization of Spillover Effects 
    - Incentive Mechanism for Infrastructure Entities

    Overall, this paper addressed the importance of spillover effects from infrastructure investment and how to utilize additional tax revenues created by the externality effects of infrastructure to attract private sector finance. It explained the economic effects of infrastructure investment that when infrastructure is having a positive effect on productivity, private firms will be able to increase output without changing input, and hence to maximize its profit.
    In this paper, it also mentioned that Public-Private Cooperation in High-Risk Projects with Viability Gap Funding will usually pose a variety of risks arising from regime change, cost increases, unexpected decreases in revenue due to fee setting and decreased traffic, unanticipated expenses and delays in land acquisition due to complicated ownership structure.

  • Urbanisation: big city life - Cities that serve people by seeking profit

    Source: Naoyuki Yoshino, Matthias Helble, Grant B. Stillman
    Date Submitted: 13 Sep 2017
    Views: 474
    Downloads: 15
    The below article was published on The quarterly journal of Good Governance Africa - April 2017 Issue 41

    This article is based on the Urbanization in big city life by taking Africa and Asia as the major case studies, to create discussion on cities that serve people by seeking profit by looking into how the positive spillover effects from improved infrastructure enhancing productivity in a region.

    In the article, research found that urbanization offers advancement, but it does not necessarily guarantee on its success. However, a well-planned urbanization can help boosting economic grow, providing that these cities must be smart to remain safe, inclusive, accessible and green.

    In urban areas in Asia, SMEs create employment and dominate the economy. To look for a new and decentralized financing methods for SMEs is crucial, as Asia economies are often characterized as having bank-dominated financial systems and undeveloped markets and venture capital. To reduce risk to lenders and giving SMEs access to the capital, home town trust funds is also introduced as a national strategy in Japan.