Brunei
Investvine-Mar 11, 2018
Brunei’s ministry of finance received a budget allocation for the 2018-2019 financial year ending March 31 of 747.32 million Brunei dollars ($568 million), most of which will be used to finance recurring expenditures in various areas including staff salaries, while a mere B$5 million ($3.8 million) have been allocated to finally set up the long-planned Brunei Stock Exchange.
Second finance minister Mohd Amin Liew Abdullah said on March 8 that the government has been working with Autoriti Monetari Brunei Darussalam to lay the groundwork, such as setting financial regulations, systems and infrastructure for the stock exchange, which could eventually materialise “in the next few years.”
Talks about launching a stock exchange in Brunei have been going on for quite some time, and as per the government’s earlier roadmap, it should have been already established in 2017.
But several factors, including the lack of a comprehensive legal framework for Brunei’s financial market, few domestic candidates for actual listings, as well as the small, oil-rich country’s recent struggle with low petroleum prices have pushed back the plan continuously.
“A number of early preparations have already been made, such as regulations, systems and infrastructure and early education,” the minister said.
“However, the establishment [of the stock exchange] is subject to legislation, systems and operations and the willingness of stakeholders,” he added.
The exchange would focus on equity listings, bonds and sukuk, exchange traded funds, foreign equity stocks, investment funds, securitised products and real estate investment trust and would open an avenue for foreign investors to enter the Brunei capital markets with low currency risk since the Brunei dollar is pegged to the Singapore dollar.
However, just about a dozen companies could be potential domestic candidates for listing, including the country’s telecoms, downstream oil and gas service firms and financial institutions such as Bank Islam Brunei Darussalam, which originally planned an initial public offering on the Malaysian stock exchange in 2017, but postponed it. Whether foreign firms would be really motivated to list in Brunei remains unclear.
