Capital Markets
From The Report: Bahrain 2018
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Despite a challenging investment environment, Bahrain’s exchange showed a relatively strong performance in 2017, with index gains in most sectors. Macroeconomic challenges remain in 2018, but new investment instruments and some significant changes to the exchange’s infrastructure are helping it to maintain its status as one of the most progressively regulated markets it the region – a key asset in the regional competition for investment capital.

This chapter contains an interview with Sheikh Khalifa bin Ebrahim Al Khalifa, CEO, Bahrain Bourse; and Najla M Al Shirawi, CEO, SICO.

Articles from this Chapter

Overview

Money maker: Tight regulatory reform strengthens the kingdom’s reputation as a key market in the region
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Despite a challenging investment environment, Bahrain’s exchange showed a relatively strong performance in 2017, with index gains in most sectors. Macroeconomic challenges remain in 2018, but new investment instruments and some significant changes to the exchange’s infrastructure are helping it to maintain its status as one of the most progressively regulated markets in the region – a key asset in the regional competition for investment capital. RAPID DEVELOPMENT: The kingdom of Bahrain…

Interview

Growth and liquidity: Sheikh Khalifa bin Ebrahim Al Khalifa, CEO, Bahrain Bourse, on increasing market breadth and widening participation
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Interview:Sheikh Khalifa bin Ebrahim Al Khalifa What is being done to diversify the mix of companies on the bourse beyond financial services? SHEIKH KHALIFA BIN EBRAHIM AL KHALIFA: Just because we want to increase exposure to new sectors does not mean we are chasing companies and trying to convince them to list. Entities need to analyse their own situation and see whether going public is the right step for them. Initial public offerings (IPOs) come with responsibilities that companies need…

Interview

Enhancing appeal: Najla M Al Shirawi, CEO, SICO, on the need for bigger free float and diversity on the bourse
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Interview:Najla M Al Shirawi, CEO, SICO How will the fixed-income segment evolve in an era of lower oil prices and tighter budgets? NAJLA M AL SHIRAWI: GCC sovereigns and quasi-sovereign institutions are expected to continue to borrow from debt capital markets in order to fund their budget deficits amidst lower oil prices. This implies that debt supply is likely to increase going forward, and could assert downward pressure on bond prices if there’s no demand. However, regional governments…

Analysis

A helping hand: A new investment market offers favourable conditions to small and medium-sized enterprises
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In October 2016 the Bahrain Bourse (BHB) obtained permission from the Central Bank of Bahrain (CBB) to establish the Bahrain Investment Market (BIM), paving the way for the exchange to open its much-anticipated market to small to mid-cap companies. Officially launched in March 2017, the initiative is in accord with the government’s broader target of boosting small and medium-sized enterprise (SME) activity in the kingdom, with the bourse having worked with government developmental organisations…

Analysis

Diversified debt: Heightened demand for Bahraini bonds as an asset class
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The landscape for fixed income has evolved significantly over the last few years and never has the argument for Bahraini bonds as a natural diversifier been stronger than in the last 12 months of 2017. BUOYANT BONDS: Bahraini bonds as an asset class have survived significant headwinds in 2017, including the ongoing discussion among GCC member states, heightened geopolitical risk, three rate hikes and a general consensus of higher interest rates going forward. Despite these challenges, the Barclays Bahrain Bond Index was up by 6.3% in October 2017, an achievement that encountered minimal volatility amid a widening budget deficit and record…

Analysis

On course: Recent milestones sustain the bourse’s forward momentum
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The Bahrain Bourse (BHB) was established in 1987 and commenced operations in 1989, with only two stocks trading. By February 2018 the bourse had grown to comprise 43 common stocks, government bonds and mutual funds, and a real estate investment trust (REIT). The market is serviced by 12 brokers, of which three are individuals. SICO is the largest broker in the kingdom. LEADERBOARD: As of November 29, 2017 the Bahrain All Share Index gained 5.2%, making it second best in the GCC after Kuwait’s increase of 7.8%. Comparatively, Standard & Poor’s GCC Index was down 4%. By February 2018 market capitalisation of the Bahrain All Share…