ASEAN KEY DESTINATIONS
Establishing stock exchange will boost economic growth
THE establishment of Brunei’s own stock exchange will support the country’s economy and allow Bruneians to invest in shares conveniently, a senior official at the Autoriti Monetari Brunei Darussalam (AMBD) said recently.
AMBD’s Managing Director Yusof Hj Abd Rahman said the central bank is collaborating with the Ministry of Finance to set up the country’s own bourse and the exchange “can act as a significant catalyst” to grow Brunei’s economy.
In a speech delivered at Wednesday’s appreciation dinner organised by the Brunei Association of Banks, he said the stock exchange is expected to boost the financial industry and increase the financial services contribution to the sultanate’s Gross Domestic Product (GDP) as envisioned in Wawasan 2035.
“Companies in the country will have alternative funding avenues other than bank loans. It will also provide a platform for Bruneians to invest in shares conveniently,” he said.
Yusof said the finance industry needs to increase its contribution to the GDP to eight per cent to attain the goals of Vision 2035. Citing latest GDP figures, he said the financial sector’s contribution to GDP improved to an average of five per cent in 2015 compared with the 3.3 per cent recorded in 2012.
“This is supported by a positive growth in credit by 7.6 per cent from $5.7 billion in 2014 to $6.1 billion in 2015 of which the greater growth was seen in the corporate sector by 10.8 per cent from $2.7 billion in 2014 to $3.0 billion in 2015,” said Yusof.
He said the improvement would not have been possible without the financial institutions’ initiatives and commitment.
“I hope that this positive growth will further motivate the banking industry to double its efforts in achieving the Wawasan 2035 target,” he said.
Yusof said falling oil prices is hurting Brunei’s economy, noting that as a key exporter of oil and gas, the sultanate “cannot avoid the negative impact of the low hydrocarbon prices in terms of export earnings affecting the government revenues and spending”.
“With the dominant role of the government in the economy, this has affected Brunei’s domestic economy as we face rough times ahead,” he said.
But Yusof said the banking industry remains resilient in spite of such challenges. The aggregate capital adequacy ratio for the banking sector is more than 20 per cent and the net non-performing financing ratio is less than two per cent as of end-2015.
Yusof warned against complacency and encouraged financial institutions to explore new opportunities.
“They must identify productive areas that could help to materialise this national commitment which will contribute to the goal of economic diversification away from the oil and gas industry,” said Yusof.
He said as a regulator, AMBD will continue to implement measures to ensure financial stability. These measures include strengthening the regulatory and supervisory framework of the financial system in line with global best practices.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below