BANDAR SERI BEGAWAN – Brunei should not take the “typical route” when trying to position its soon-to-be-established capital market, an Islamic finance expert suggested.

Instead, it should bring in foreign players to issue their instruments in Brunei, said the associate dean from the International Centre of Education in Islamic Finance (INCEIF).

“[Once you have the ecosystem in place], you can then provide incentives such as competitive tax,” Dr Mohd Eskandar Shah Mohd Rasid said.

According to him, Brunei should not be competing with more established capital markets but rather, be complementing their services. He noted that there is room for improvements in the global market that Brunei can tap into, such as ethical investments.

Dr Mohd Eskandar is in the country for the lead-up to Brunei’s first Islamic capital market conference, BICAM 2018. The two-day event is slated for October 22 and will be an avenue for experts and researchers to knowledge-share and discuss issues pertaining to the field.

Associate dean at the International Centre for Education in Islamic Finance Dr Mohd Eskandar Shah Mohd Rasid (C) and AMBD Capital Markets Manager Siti Nurul Hamizah Hj Kula (R), at the BICAM 2018 press conference. Photo: Hadthiah Hazair/ The Scoop

During the Legislative Council meeting last March, it was disclosed that $5 million has been allocated for the launch of Brunei’s stock exchange. According to the second finance minister YB Dato Seri Setia Dr Hj Mohd Amin Liew Abdullah, the launch of capital market activities would create employment for locals and promote more investment into Brunei, outside of the energy sector. He did not disclose when Brunei will have the infrastructure ready for a stock exchange, but indicated that it will be in the “next few years”.

For the upcoming conference, Dr Mohd Eskandar said that one of the reasons INCEIF agreed to be an event partner with the Centre for Islamic Banking, Finance and Management (CIBFM), is not merely to raise market awareness, but also in hopes that the conference will act as a stepping stone to realise Brunei’s aspirations.

“We hope that it will help create a proposition for what Brunei has in plan for the next ten years,” he said.

When asked whether the BICAM 2018 is geared towards helping Brunei prepare for the eventual establishment of its stock exchange, Autoriti Monetari Brunei Darussalam Capital Markets Manager Siti Nurul Hamizah Hj Kula, said that it is a ” part and parcel of it” and is hoped to prepare those who will be involved.