BRUNEI'S Islamic finance strategy is linked to a broader economic agenda of "participating in enhanced intra-OIC (Organisation of the Islamic Conference) trade flows", said the Managing Director of Autoriti Monetari Brunei Darussalam (AMBD) at a conference on Islamic banking in Singapore yesterday.
Giving a speech at the 2nd Annual World Islamic Banking Conference (Asia Summit) held at the Pan Pacific Hotel, Hj Mohd Rosli Hj Sabtu said, one major area being actively pursued by the Sultanate is in the manufacturing of halal products, "including food and pharmaceutical". (source)
Apart from providing capital, the government makes it a point to support "operating companies in the real economy" to enhance growth in this sector.
In efforts to diversify its economy, Brunei provides opportunities "for alternative financing", specifically to "develop SMEs and promote FDIs", Hj Mohd Rosli added, saying Islamic Financial Institutions "can contribute to and be partners" in the country's development programmes.
In discussing the topic "Enhancing the Role of Islamic Finance in Creating Stronger Business and Investment Ties between Asia and Other Key Islamic Financial Centres", Hj Mohd Rosli said, Brunei "has a significant role to play in enhancing cross border linkages of Islamic Finance".
The Sultanate, with its "impeccable Islamic credentials", "unrivalled political and economic stability" and "strategic geographical location in the most dynamic part of Asia", is well-positioned to become an Islamic Finance hub, he said.
In Brunei, he explained, "the total assets of Islamic banks represent about 37 per cent of the overall banking industry, reflecting an average growth rate of 21 per cent for the past decade".
Meanwhile, he added, the Takaful Industry grew by 74 per cent last year, representing 30 per cent of the Sultanate's insurance industry.
These developments took place over a period of twenty years, since the first Islamic institution was established in Brunei, and reflect, he said, "the underlying customers' demand for Islamic products.
Hj Mohd Rosli said this "significant achievement" would not have been possible without "the strong leadership" of His Majesty and Yang DiPertuan of Brunei Darussalam who has been instrumental in "advancing the development of Islamic Finance in the country".
Furthermore, other factors which will help the Sultanate achieve its aspiration of becoming an Islamic Finance hub, include "the presence of huge liquidity and comprehensive legal and regulatory framework" as well as the "excellent physical and administrative infrastructures" for Islamic financial activities.
Without having to introduce conventional capital markets instruments, Brunei has managed to establish its Islamic Capital Market with the launch of its first ever short-term Islamic Bond, "Sukuk Al-Ijara" in 2006, said the Managing Director. To date, he added, "58 series of Sukuk Al-Ijara with a total value of $2.7 billion" have been issued to primary dealers.
The sukuk market, he said, has become "the most significant and vibrant segment in the international Islamic financial system", rapidly generating "significant cross-border flows, as funds are raised from beyond domestic financial markets" and investors diversify their portfolios "into assets from other jurisdictions".
The Managing Director also said that "product positioning and pricing strategies will be the key success factors" to attract an investible fund worth an estimate US$1 trillion looking for "viable Islamic investment avenues".
In this respect, Hj Mohd Rosli proposed enhancing cross-border activity by expanding into newer markets, "for instance building up synergies between sovereign institutions and private shareholders".
The two-day conference, attended by key players in the Islamic Finance industry including Halim Alamsyah, Deputy Governor of Bank Indonesia, Lim Hng Kiang, Minister for Trade and Industry Republic of Singapore and Deputy Chairman Monetary Authority of Singapore as well as Tan Sri Zarinah Anwar, Chairman of Securities Commission Malaysia, ends today.
The Brunei Times
Giving a speech at the 2nd Annual World Islamic Banking Conference (Asia Summit) held at the Pan Pacific Hotel, Hj Mohd Rosli Hj Sabtu said, one major area being actively pursued by the Sultanate is in the manufacturing of halal products, "including food and pharmaceutical". (source)
Apart from providing capital, the government makes it a point to support "operating companies in the real economy" to enhance growth in this sector.
In efforts to diversify its economy, Brunei provides opportunities "for alternative financing", specifically to "develop SMEs and promote FDIs", Hj Mohd Rosli added, saying Islamic Financial Institutions "can contribute to and be partners" in the country's development programmes.
In discussing the topic "Enhancing the Role of Islamic Finance in Creating Stronger Business and Investment Ties between Asia and Other Key Islamic Financial Centres", Hj Mohd Rosli said, Brunei "has a significant role to play in enhancing cross border linkages of Islamic Finance".
The Sultanate, with its "impeccable Islamic credentials", "unrivalled political and economic stability" and "strategic geographical location in the most dynamic part of Asia", is well-positioned to become an Islamic Finance hub, he said.
In Brunei, he explained, "the total assets of Islamic banks represent about 37 per cent of the overall banking industry, reflecting an average growth rate of 21 per cent for the past decade".
Meanwhile, he added, the Takaful Industry grew by 74 per cent last year, representing 30 per cent of the Sultanate's insurance industry.
These developments took place over a period of twenty years, since the first Islamic institution was established in Brunei, and reflect, he said, "the underlying customers' demand for Islamic products.
Hj Mohd Rosli said this "significant achievement" would not have been possible without "the strong leadership" of His Majesty and Yang DiPertuan of Brunei Darussalam who has been instrumental in "advancing the development of Islamic Finance in the country".
Furthermore, other factors which will help the Sultanate achieve its aspiration of becoming an Islamic Finance hub, include "the presence of huge liquidity and comprehensive legal and regulatory framework" as well as the "excellent physical and administrative infrastructures" for Islamic financial activities.
Without having to introduce conventional capital markets instruments, Brunei has managed to establish its Islamic Capital Market with the launch of its first ever short-term Islamic Bond, "Sukuk Al-Ijara" in 2006, said the Managing Director. To date, he added, "58 series of Sukuk Al-Ijara with a total value of $2.7 billion" have been issued to primary dealers.
The sukuk market, he said, has become "the most significant and vibrant segment in the international Islamic financial system", rapidly generating "significant cross-border flows, as funds are raised from beyond domestic financial markets" and investors diversify their portfolios "into assets from other jurisdictions".
The Managing Director also said that "product positioning and pricing strategies will be the key success factors" to attract an investible fund worth an estimate US$1 trillion looking for "viable Islamic investment avenues".
In this respect, Hj Mohd Rosli proposed enhancing cross-border activity by expanding into newer markets, "for instance building up synergies between sovereign institutions and private shareholders".
The two-day conference, attended by key players in the Islamic Finance industry including Halim Alamsyah, Deputy Governor of Bank Indonesia, Lim Hng Kiang, Minister for Trade and Industry Republic of Singapore and Deputy Chairman Monetary Authority of Singapore as well as Tan Sri Zarinah Anwar, Chairman of Securities Commission Malaysia, ends today.
The Brunei Times
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