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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2011
BAHRAIN BOURSE
Yusif Humood
Chairman
Bahrain Bourse continued the development
of its trading mechanisms in a way that will
attract different segments of investors and
clients, and increase their profitability.
Despite the signs of relative recovery from
the global financial crisis that had an impact
on different countries worldwide in 2008
along with the increase in oil prices during
the second half of 2009, the response of the
market indices in the region to this recovery
varied among markets. The reasons for such
variation are partly psychological reasons,
and the other part goes back to the
distinctive characteristics of each market that
differentiates one market from another.
The performance of Bahrain All Share Index
this year and the volume and value of shares
traded reflects the psychological state that
prevailed among investors at Bahrain Bourse
resulting from the consequences of the crisis
in spite of the good financial results reported
by the majority of companies listed at the
Exchange. This has led to a 19.17% drop in
the index compared to its closing at the end
of 2008.
In line with the development strategy
approved by the Board of Directors of
Bahrain Bourse five years ago, one of the
major decisions in the history of the capital
markets’ sector was made with the issuance
of Resolution No. (57) of 2009 in respect of
corporatizing the Exchange and transforming
it to a shareholding company, paving the
way to major legal, administrative, and
technical modifications that would change
how the Exchange operates.
Bahrain Bourse has completed the major
part of its relocation project to Bahrain
Financial Harbour in 2009. The new premises
have been equipped with advanced
technology and systems in a way that will
enhance Bahrain Bourse’s competitiveness
to provide more services. This will also
enable Bahrain Bourse to provide the
technical infrastructure that would encourage
companies to benefit from these facilities.
Bahrain Bourse continued the development
of its trading mechanisms in a way that will
attract different segments of investors and
clients, and increase their profitability when
trading in the shares of listed companies at
the Exchange. In addition, the bourse
widened its scope of cooperation with
leading regional and international financial
institutions to be able to provide its
custodian services at the Exchange with the
aim of enabling local and foreign institutional
clients to invest at Bahrain Bourse and
benefit from the opportunities available.
Looking into Bahrain Bourse’s financial
performance in 2009, the global crisis had an
effect on the financial status of the Exchange
where the operating surplus activate revenue
reported a deficit of BD 127,180 thousand
compared to the surplus in 2008. The
accumulated surplus also decreased slightly
from BD 3,950,112 to BD 3,822,932,
recording a drop of 3.21%.
On behalf of the members of Bahrain
Bourse’s Board of Directors and staff, I
would like to express my thanks and
gratitude to His Majesty King Hamad bin Isa
bin Salman Al Khalifa, King of the Kingdom
of Bahrain and His Royal Highness Prince
Khalifa bin Salman Al Khalifa, the Prime
Minister, and His Royal Highness Prince
Salman bin Hamad Al Khalifa, the Crown
Prince and Deputy Supreme Commander for
their guidance and continuous support of
Bahrain Bourse.
I would also like to extend my thanks to the
Central Bank of Bahrain’s Chairman and
members of the Board of Directors for their
support of Bahrain Bourse. I would also like
to thank the members of the Board of
Directors of Bahrain Bourse for their opinions
and contributions to the development of the
bourse in the previous years. I would also
like to thank Bahrain Bourse’s management
and staff for their hard work during the year,
hoping that such efforts will continue to
further develop the Exchange.
HISTORY AND DEVELOPMENT
Bahrain Bourse (BHB) was established as a
shareholding company according to Law
No. 60 for the year 2010 to replace Bahrain
Stock Exchange (BSE) that was established
in 1987.
The emergence of the capital markets sector
in the Kingdom of Bahrain dates back to
1921 following the establishment of the first
branch of a commercial bank (Standard
Chartered Bank).
In 1957, the first Bahraini Public
Shareholding Company was established.
Since then, more local public shareholding
companies began to operate, reaching their
peak in the beginning of the 1980’s.
During this period, shares of public
shareholding companies were being actively
traded in a non-official market called “Al
Jowhara Market”.
As a result of a feasibility study prepared by
the Government and the International
Finance Corporation (IFC) highlighting the
importance of establishing an official stock
market in Bahrain, Amiri Decree No. 4 was
issued to establish the Bahrain Stock
Exchange (BSE) in 1987. The Exchange
officially commenced operations in June
1989 with 29 Bahraini shareholding
companies listed.
In 1999, BHB implemented the automated
trading system (ATS) to carry out all the
exchange’s transactions electronically
instead of the manual trading.
In 2002, the regulatory authority and
supervision of BHB was transferred from the
Ministry of Commerce to the Central Bank of
Bahrain (CBB) in which CBB regulates and
supervises all the Exchange’s activities.
FUTURE OUTLOOK
In the year 2010, Bahrain Bourse will
continue its efforts to attract more local,
regional, and international mutual funds.
The bourse will continue to attract more
listed companies, both local and
international and will also seek more
cooperation with stock exchanges
worldwide, with the aim of exchanging
information and expertise. In addition,
Bahrain Bourse will pursue strategic
partnerships in many different areas that we
hope to add value to all parties involved.
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