ASEAN KEY DESTINATIONS
Investors keen on ASEAN markets
BRUNEI’S plan to set up a stock exchange in 2017 has piqued the interest of global investors.
According to Gavin Chia, corporate development manager at the Singapore-based financial advisory and brokerage Philip Securities, investors are focusing on emerging financial markets in Southeast Asia as they have the biggest potential for growth.
Chia was recently in the sultanate to hold a series of workshops on fundamental analysis, with focus on global factors affecting the stock market. The workshops were organised by Baiduri Capital and Phillip Securities.
The Autoriti Monetari Brunei Darussalam (AMDB) said last May a stock market will be up and running by 2017. Chia said AMBD’s key role is to strike a balance between regulation and openness in trading.
“There has to be a balance in capital control. If regulation becomes too strong, then trading will become too slow, “ he said.
He cited the US bourse, where everyone can buy and sell stocks quickly. But in Vietnam, an investor who buys stocks on Monday can only sell it on Wednesday.
Chia said a stock exchange needs to have at least five listed companies to attract more investors. Some ASEAN exchanges, however, don’t conform to this standard.
“The stock exchanges of Laos and Cambodia, have less than five companies listed, and consequently don't see much activity in drawing investments since launching several years ago. Attracting companies to be listed is key,” he said.
Chia said Brunei’s plan to set up a stock exchange should also entail a shift in mindset among local companies. The idea of being publicly-listed will only appeal to companies which want to expand beyond Brunei and/or are implementing major projects which require huge funding.
“It's a milestone and prestigious for most (companies) to be listed on an exchange. But the real push behind wanting to go public is to raise money, outside the typical channels of the banking system, for expansion or projects and to also spread the risk ownership among a larger group of shareholders,” said Chia.
He said Brunei should learn from the Singapore Exchange (SGX) given the strong ties between the two countries.
“Other countries in the region which opened exchanges recently sought the help from well-established bourses from Japan and South Korea. Brunei could do the same with SGX,” he said.
He said the currency peg between the two countries “makes further cooperation only natural, and will also prove to be a draw for Brunei’s exchange among Singapore investors”.
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