Bahrain Stock Exchange
|Bahrain Stock Exchange|
|Key People||Chairman Rasheed Mohammed Al-Maraj|
|Products||Bahrain All Share Index|
The Bahrain Stock Exchange is one of the Middle East's smaller securities exchanges, with market capitalization in February 2010 of around US$17 billion, similar in size to nearby Oman's Muscat Securities Market. The BSE has been approved for demutualization by mid-2010, giving it independence from current operator the Central Bank of Bahrain - which will then become the BSE's regulator.
The Kingdom of Bahrain in 1967 decided, with the help of the International Finance Corporation, to launch the Bahrain Stock Exchange (BSE) as part of the Central Bank of Bahrain (CBB) following years of growth in public stock trading at its predecessor, the Al Jowhara Market, which the BSE todays calls "non-official". The exchange began trading officially two years later, in June 1989.
In recent years the Bahrain Stock Exchange has invested in modernizing its operations and governance. First, in April 2008 the BSE agreed to provide direct online trading services to its member brokers, then several months later, in October 2008, the BSE teamed up with the Singapore Exchange (SGX) to expand listings and improve listed-company information for exchange investors.
Then in late 2009 the BSE learned that its application for demutualization had been approved and it would begin operating as a shareholding company regulated by the CBB. But before that happens - sometime in the first quarter of 2010 - the BSE's first serious national rival in securities trading, the Bahrain Financial Exchange (BFX), is expected to begin trading for public investors. That comes more than a year after the Financial Technologies India-owned BFX first announced its entry into the Bahraini public securities-trading market.
The BSE suffered further fallout in 2009 from the global financial crisis of the previous year. The exchange's total market cap declined 18.5% in 2009 from 7.52b Bahraini dinars (US$20b) at the end of 2008 to 6.13b a year later, while the benchmark Bahrain All Share Index fell 19.2% over the same period. Trading volume on the BSE in 2009 plunged 49.1% while value traded fell 77.3%.
But early signs of BSE investor activity in 2010 are encouraging. Already the exchange's All Share Index is up about 2.69% for the month of February 2010 while market capitalization is up 2.73 to a total value of 6.39 Bahraini dinars. Volume traded on the BSE rose 46.52% over the same period while the value of shares traded jumped 33.64%, with the investment sector drawing most interest. Currently the largest traded stock by market capitalization on the Bahrain Stock Exchange is mobile-phone provider Bahrain Telecommunications Co (BATELCO), which accounts for 13.86% of the BSE's total market value.
Rasheed Mohammed Al Maraj, the governor of the Central Bank of Bahrain since 2005, is by law still chairman of the Bahrain Stock Exchange until the BSE's expected demutualization later in 2010. Prior to joining the CBB he was CEO of Saudi Arabia-based Arab Petroleum Investments Corporation. He is also a director of Bahrain's Economic Development Board (EDB), National Oil and Gas Authority (NOGA) and Telecommunications Regulatory Authority (TRA).
The Bahrain stock market appears to have retained investor confidence in early 2010 despite an apparent loss of confidence in some of its Gulf Co-operation Council (GCC) neighbors, according to a recent survey. Bahrain's Investor Confidence Index fell just 1.9 points in February 2010 compared to an 11.7-point fall in the United Arab Emirates (UAE) and 8.6 points in Saudi Arabia. Investors also showed little change in their view of the current state of Bahrain's economy.
- History. Bahrain Stock Exchange.
- BSE to offer online trading platform for brokerages. Gulf Daily News.
- SGX to provide consultancy services for Bahrain Stock Exchange. Channel News Asia.
- Bahrain bourse to become shareholding company. TradeArabia.com.
- Annual Trading Bulletin 2009. Bahrain Stock Exchange.
- Market Performance. Bahrain Stock Exchange.
- Rasheed M. Al Maraj, Governor, Central Bank of Bahrain. 2nd GCC Regulators' Summit 2008.
- GCC Investor Confidence Index falls. Emirates Business 24/7.