Bank Islam Brunei eyes stock listing – but not at home
Bank Islam Brunei Darussalam Bhd is exploring an initial public offering (IPO) which would be the first one of a company based in the Sultanate. But since the small nation still does not have a stock exchange, Bank Islam considers a listing in either Singapore, Kuala Lumpur or London, Bloomberg reports.
The deliberations are at an early stage, and the company may decide against pursuing an offering, the report noted.
Bank Islam Brunei Darussalam was founded in 2005 through a merger of Islamic Bank of Brunei with Islamic Development Bank of Brunei and had $5.3 billion of assets at the end of 2015. It has 15 branches across Brunei and employs more than 700 people. Current shareholders include the Brunei finance ministry, the Sultan Haji Hassanal Bolkiah Foundation, private equity firm Fajr Capital Ltd and about 6,000 Bruneian investors, according to its website.
Brunei is currently in the process of setting up its own stock exchange, but the process is painstakingly slow. In May 2015 Brunei’s financial regulator, the Autoriti Monetari Brunei Darussalam (AMBD), announced that it was evaluating the possibility of establishing a national bourse.
So far, the first draft of the stock exchange rules, which includes the listing rules for publicly traded corporations, have been outlined and a payment and settlement system, including an automated clearinghouse, has been set up. The next step would be the implementation of an operative infrastructure.
The AMBD said it hopes to launch a new exchange at some point in 2017 with the initial focus expected to be on equities followed by both conventional and Islamic bonds.
There are currently around a dozen domestic entities thought to be interested in listing, including Bank Islam Brunei Darussalem, Telekom Brunei and a number of downstream oil and gas firms. The AMBD noted that a national exchange will encourage diversification away from the oil and gas sector in the country while also delivering an alternative source of capital for small and medium enterprises and improvements in corporate governance generally.
However, financial analysts say that it is unlikely, although not impossible, that the 2017 target could be met. They also note that the exchange would have little liquidity due to its small size and the small number of potential stock domestic investors, and many family-owned firms would have to improve their financial reporting first to explore a listing.
Bank Islam Brunei Darussalam Bhd is exploring an initial public offering (IPO) which would be the first one of a company based in the Sultanate. But since the small nation still does not have a stock exchange, Bank Islam considers a listing in either Singapore, Kuala Lumpur or London, Bloomberg reports. The deliberations are at an early stage, and the company may decide against pursuing an offering, the report noted. Bank Islam Brunei Darussalam was founded in 2005 through a merger of Islamic Bank of Brunei with Islamic Development Bank of Brunei and had $5.3 billion of assets at the...
Bank Islam Brunei Darussalam Bhd is exploring an initial public offering (IPO) which would be the first one of a company based in the Sultanate. But since the small nation still does not have a stock exchange, Bank Islam considers a listing in either Singapore, Kuala Lumpur or London, Bloomberg reports.
The deliberations are at an early stage, and the company may decide against pursuing an offering, the report noted.
Bank Islam Brunei Darussalam was founded in 2005 through a merger of Islamic Bank of Brunei with Islamic Development Bank of Brunei and had $5.3 billion of assets at the end of 2015. It has 15 branches across Brunei and employs more than 700 people. Current shareholders include the Brunei finance ministry, the Sultan Haji Hassanal Bolkiah Foundation, private equity firm Fajr Capital Ltd and about 6,000 Bruneian investors, according to its website.
Brunei is currently in the process of setting up its own stock exchange, but the process is painstakingly slow. In May 2015 Brunei’s financial regulator, the Autoriti Monetari Brunei Darussalam (AMBD), announced that it was evaluating the possibility of establishing a national bourse.
So far, the first draft of the stock exchange rules, which includes the listing rules for publicly traded corporations, have been outlined and a payment and settlement system, including an automated clearinghouse, has been set up. The next step would be the implementation of an operative infrastructure.
The AMBD said it hopes to launch a new exchange at some point in 2017 with the initial focus expected to be on equities followed by both conventional and Islamic bonds.
There are currently around a dozen domestic entities thought to be interested in listing, including Bank Islam Brunei Darussalem, Telekom Brunei and a number of downstream oil and gas firms. The AMBD noted that a national exchange will encourage diversification away from the oil and gas sector in the country while also delivering an alternative source of capital for small and medium enterprises and improvements in corporate governance generally.
However, financial analysts say that it is unlikely, although not impossible, that the 2017 target could be met. They also note that the exchange would have little liquidity due to its small size and the small number of potential stock domestic investors, and many family-owned firms would have to improve their financial reporting first to explore a listing.
