Capital Markets
From The Report: Bahrain 2015
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June 2014 marked the 25th anniversary of trading on the bourse, which began operating as the Bahrain Stock Exchange in 1989. The market looks to have recovered from the global financial crisis, and in 2013 posted an 18.9% year-on-year increase in market capitalisation, with the trend continuing into 2014, with a 21.7% rise to BD8.47bn ($22.45bn) at the end of September 2014. The banking sector accounts for the bulk of activity, with commercial banks comprising 69.16% of the value of all shares traded in the first nine months of 2014. In a drive to increase liquidity the Bahrain Bourse has recently extended its trading day, and in July 2014 it upgraded its NASDAQ OMX trading platform from the Horizon platform to the X-stream system. Moreover, positive steps to encourage more trading – particularly within the GCC – have been taken, while discussions are also under way to increase listings, including development of a specific framework under which SMEs might be attracted to trade on the exchange.

This chapter contains an interview with Khalifa bin Ebrahim Al Khalifa, CEO, Bahrain Bourse; and a viewpoint from Najla M Al Shirawi, CEO, Securities & Investment Company.

Articles from this Chapter

Overview

Market capitalisation grows as Bahrain Bourse turns 25
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With an 18.9% year-on-year increase in market capitalisation and a 17.2% hike in the Bahrain All-Share Index, 2013 was a positive year for the Bahrain Bourse. This positive trend continued into 2014 as well, with a 21.7% rise in market capitalisation to BD8.47bn ($22.45bn) at the end of September 2014 and a 23.63% increase year to date in the Bahrain All-Share Index, which ended the third quarter at 1476.02, exceeding highs last seen in early 2011. Milestone Passed On February 6, 2014 the Bahrain…

Interview

Khalifa bin Ebrahim Al Khalifa, CEO, Bahrain Bourse (BHB): Interview
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Interview:Khalifa bin Ebrahim Al Khalifa What products and reforms would help to increase the liquidity and sophistication of the BHB? KHALIFA BIN EBRAHIM AL KHALIFA: Increasing liquidity is one of our strategic goals and we have launched several initiatives. We recently introduced an online trading incentive programme to encourage retail and private participants to trade on the exchange, the first such initiative in the Middle East. The aim of this is to incentivise brokerage houses to facilitate…

Viewpoint

Najla M Al Shirawi, CEO, Securities & Investment Company, on ways to attract more liquidity to the local bourse
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Relative illiquidity and low free float constitute two key challenges to the growth of the Bahrain Bourse (BHB). One of the main reasons is the low free float in blue chip companies: nine out of the top 15 stocks have a free float of lower than 25%. While it is widely reported that Batelco and Aluminium Bahrain (Alba) have a free float of 23% and 10%, respectively, actual trading volumes imply a real free float of just 2-3%. A low free float makes it difficult to execute large orders without significant…

Analysis

Supporting new listings and foreign investment on Bahrain’s financial markets
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As is the case with many financial centres in the MENA region, the stock market in Manama faces a liquidity challenge. However, the Bahrain Bourse, backed by regulators at the Central Bank of Bahrain (CBB), is introducing measures to stimulate securities trading in the kingdom. While fewer firms in the GCC have a need to turn to bonds and stocks to raise capital than in other jurisdictions, those in charge of the bourse are keen to see it play a wider role in attracting international investment to…

Analysis

Share analysis: Batelco – Telecoms
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The Company Bahrain Telecommunications Company (Batelco) is the oldest and largest telecom service provider in the kingdom. Established in 1981 as a Bahraini shareholding company, it offers telecom services across the fixed-line, mobile and internet segments. Batelco has evolved from a regional operator to a major international communications group, with direct and indirect investments across 14 geographies: Bahrain, Jordan, Kuwait, Saudi Arabia, Yemen, Egypt, Guernsey, Jersey, the Isle of Man, the Maldives, Diego Garcia, St. Helena, Ascension Island and the Falklands. The government of Bahrain controls Batelco through direct and indirect investments.…

Analysis

Share analysis: Seef – Real estate
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The Company Seef Properties is primarily a mall operator and it manages Seef Mall, Bahrain’s second-largest shopping mall, with a gross leasable area (GLA) of 72,000 sq metres. Seef also has a serviced apartments division, through which it operates Fraser Suites, and a recreational facilities division that includes Magic Island, a family entertainment facility at its malls. Seef was established in 1999 by the government of Bahrain as a public registered company under the Ministry of Industry and Commerce, and was listed on the Bahrain Stock Exchange (now the Bahrain Bourse) in 2007 as part of the government’s privatisation initiative. Paid-up…

Analysis

Share analysis: Alba – Aluminium
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The Company Aluminium Bahrain (Alba) is the Middle East’s second-largest aluminium producer and ninth-largest globally in terms of tonnage. It was established in 1968 and officially commissioned on May 11, 1971 as a 120,000-tonnes-per-annum (tpa) smelter. Today, the company produces more than 920,000 tpa, having expanded in 1981, 1990, 1992 and 1997 – making the smelter one of the largest single-site producers of aluminium in the world. Around 45% of output is supplied to Bahrain’s downstream industry, with the rest exported to regional and international customers. Alba’s smelting operations consist of five production pot lines, three…

Analysis

Share analysis: Ahli United Bank – Banking
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The Company Ahli United Bank (AUB), a full-fledged commercial and investment banking group providing wealth management, retail, corporate, treasury, offshore and private banking services, is Bahrain’s largest commercial bank by market capitalisation and asset base. Incorporated in April 2000, AUB is regulated by the Central Bank of Bahrain under a retail banking licence. The group's businesses consist of its operations in Bahrain; subsidiaries in the UK, Kuwait, Egypt and Iraq; and associates in Oman and Libya. AUB was formed by the merger of United Bank of Kuwait and Ahli United Bank of Bahrain. AUB's ordinary shares have been listed on the…

Analysis

Share analysis: Gulf Hotel Group – Hospitality
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The Company Gulf Hotel Group (GHG) is a public limited liability company that has been listed on the Bahrain Bourse since 1987. A luxury hotel brand, GHG was inaugurated in 1967 under the name of Bahrain Hotels Company. The company is primarily involved in two main operations: the management of hotels, residential and commercial properties; and food and beverage retail and distribution. The group operates mainly in Bahrain, with only one international venture, located in Zanzibar, via its wholly owned hotel management subsidiary. The major shareholder of GHG is the government-owned Gulf Air Company, which holds a 30.14% stake in the group. The…

Analysis

Share analysis: Al Salam Bank-Bahrain – Banking
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The Company Al Salam Bank-Bahrain (ASBB) is a diversified Islamic bank engaged in commercial and investment banking and providing wealth management, retail, corporate, treasury, offshore and private banking services. Incorporated in January 2006, ASBB is regulated by the Central Bank of Bahrain under a retail banking licence. ASBB’s businesses consist of its operations in Bahrain, as well as its various subsidiaries and associates located in the UK, Saudi Arabia, Singapore and Algeria. ASBB was listed on the Bahrain Bourse on April 27, 2006, and was subsequently listed on the Dubai Financial Market on March 26, 2008. Following the acquisition…