BANDAR SERI BEGAWAN — Autoriti Monetari Brunei Darussalam (AMBD) plans to expand the domestic sukuk programme to further diversify investment opportunities, the central bank’s managing director said on Wednesday.

Hjh Rokiah Hj Badar said AMBD intends to lower the cost of sukuk issuance and provide legal templates that are in line with Syariah standards.

The Brunei government issues sukuk once a month at up to $100 million per issuance.

Since 2006, the Brunei government has offered $14.33 billion of short-term Sukuk Al-Ijarah securities.

Hjh Rokiah said she hoped to see more sukuk issuances in the domestic market that can contribute to the development of the Islamic capital market and support economic diversification efforts.

The managing director was speaking at the Brunei Darussalam Islamic Capital Market Conference 2021, jointly organised by Brunei Institute of Leadership & Islamic Finance (BILIF) and Malaysia’s International Centre for Education in Islamic Finance.

The virtual conference was held as part of the first Brunei Mid-Year Conference and Exhibition (MYCE) organised by the Ministry of Primary Resource and Tourism (MPRT). 

Hjh Rokiah said discussions at the conference will provide insights on innovative and practical solutions to propel the Islamic capital market and Islamic finance  to a higher level.

The two-day event features experts and speakers from Brunei, Malaysia, Indonesia, as well as international standard-setting bodies and development banks including the Islamic Financial Services Board, Islamic Research & Training Institute, International Monetary Fund, and World Bank.

Speaking on sustainable finance, Hjh Rokiah said the concept of sustainable, responsible and impact investing (SRI) has grown in importance globally.

SRI considers environmental, social and corporate governance to generate long-term financial returns and positive societal impact. 

AMBD has undertaken initiatives in the development of sustainable finance in Brunei, Hjh Rokiah said.

“A Sustainable Finance Task Force (SFTF) was established in 2020 to monitor the development of sustainable finance both globally and regionally.

“The task force serves as a platform for continuous engagement with market players in further fostering the sustainability agenda,” she added.

Under the Brunei Darussalam National Climate Change Policy, AMBD is responsible for facilitating the issuance of green sukuk to finance renewable energy projects.

The managing director believes there is considerable growth potential in Brunei’s Islamic capital market. 

She said Brunei has unique characteristics that can be leveraged to evolve into an Islamic fund management hub serving the fast-growing ASEAN region.

This story was updated on June 4, 2021 to correct the AMBD managing director’s statement that the central bank intends to lower the cost of sukuk issuance, and not lower the prices of sukuk.