Interview: Sheikh Khalifa bin Ebrahim Al Khalifa
How is Bahrain Economic Vision 2030 impacting the development of the local capital markets?
SHEIKH KHALIFA BIN EBRAHIM AL KHALIFA: Bahrain Economic Vision 2030 has been pivotal in revitalising Bahrain’s capital markets, which saw the last initial public offering (IPO) occurring in 2018. In the wake of the Covid-19 pandemic, the Economic Recovery Plan initiated in 2021 focused significantly on the capital markets, enhancing infrastructure, technology and legal frameworks. This has led to a pipeline that should see the launch of numerous IPOs over the coming years. These measures are designed to attract both institutional and retail investors, and enhance liquidity and investor participation.
Introducing IPOs for state-owned enterprises can also boost market liquidity and attractiveness. Such landmark IPOs serve as catalysts for investment. Additionally, diversifying trading tools – including the expansion of debt markets and the introduction of market-making activities – plays a crucial role in enriching the market’s ecosystem, facilitating greater participation and enhancing overall market dynamics.
In what ways are global economic uncertainties impacting investor confidence and asset allocation within Bahrain’s capital markets?
SHEIKH KHALIFA: Global economic uncertainties, including fluctuations in oil prices and geopolitical tensions, have a significant influence on investor confidence and asset allocation. However, Bahrain’s experience with navigating such challenges has fostered a certain resilience and adaptability among investors. While some investors may exit during turbulent times, others see such periods as opportunities, particularly given Bahrain’s relatively stable political environment within the GCC, which continues to attract foreign direct investment. Moreover, the local capital markets have consistently demonstrated robustness and have rebounded strongly after periods of initial economic shock, such as the drop in oil prices during 2014-15.
What are the implications of mandatory environmental, social and governance (ESG) reporting?
SHEIKH KHALIFA: The implementation of mandatory ESG reporting for listed and financial companies from the end of 2024 is set to enhance the attractiveness of local capital markets. With global investors increasingly prioritising ESG metrics, Bahrain’s proactive approach – being among the first countries in the region to mandate ESG disclosures – positions it favourably on the international stage. This policy aligns with global investment trends and encourages local companies to adopt sustainable practices, making the market appealing to a broader spectrum of investors.
To what extent is technology reshaping the trading landscape and efficiency in the capital markets?
SHEIKH KHALIFA: Technology is transforming the trading landscape by enhancing efficiency and accessibility. Digital trading platforms and integrated payment systems allow more direct market access, particularly for retail investors. While embracing these technologies, BHB remains cautious, and is prioritising investor protection – especially for retail participants – against potential risks and market volatility. This approach to adoption should ensure that innovation bolsters market integrity without compromising security.
Where can improvements be made in educating and enhancing the participation of retail investors?
SHEIKH KHALIFA: Improving retail investor education and participation can advance significantly through long-term educational programmes and technological innovation. Bahrain is developing various initiatives targeting different age groups, from schoolchildren to adults, and leveraging technology to facilitate virtual seminars and workshops. By integrating platforms like BenefitPay into trading systems, BHB aims to simplify the trading process and make it more accessible and appealing, which is likely to increase participation.
Read More from OBG
