In 2016, the majority of trading indicators ended the year positively in spite of a difficult year for the GCC financial markets and Bourses, including Bahrain Bourse (BHB). Accordingly, BHB’s positive performance reflected investors’ confidence in the performance of public shareholding companies, the solid legal infrastructure of the Bourse, and the credibility of Bahrain Bourse’s systems and procedures.
Bahrain All Share’s Index ended the year 2016 with a slight increase of 0.38% than the previous year, while Bahrain Islamic Index rose by 11.18%. The values of shares traded increased by 13.17% in comparison to 2015, and the volume of shares traded also increased by 42.45%, whereas the number of transactions executed in 2016 decreased by 5.83% compared to 2015.
During 2016, Bahrain Bourse continued its achievements in various areas by implementing the projects approved in BHB’s strategic plan, along with other projects intended to improve the investment environment of Bahrain Bourse in particular and the capital markets sector in the Kingdom of Bahrain in general and enhance the accessibility of issuers of securities and investors to the investment opportunities available at the Bourse. This year, Bahrain Bourse, in cooperation with the Central Bank of Bahrain, finalized the requirements for launching the Treasury Bills (T-Bills) Market that resulted in the listing of 42 T-Bill issues with a total value of BD2.82 billion. The listing of the T-Bills allowed individual investors to invest in the primary and secondary market of those instruments. Prior to that, investing in T-bills was limited to financial institutions only through the primary market.
Besides the T-Bills Market, Bahrain Bourse completed the legislative, technical, and administrative requirements for launching the REITs and Funds Instruments Market. As a result, the Kingdom of Bahrain witnessed the first Real Estate Investment Trust (REIT) Initial Public Offering (IPO), namely Eskan Bank Units of the Eskan Bank Realty Income. This listing opened the door for a wide range of investors to benefit from the investment opportunities available in the real estate sector at minimal ticket sizes. This market also provides an excellent opportunity for real estate developers to finance real estate projects as well as asset managers.
In line with Bahrain Bourse’s commitment to undertake procedures to enhance the investment environment of the capital markets sector according to International Standards, the Bourse approved Securities & Investment Co. (SICO) as the first Market Maker at Bahrain Bourse. Providing SICO with its Market-Making services served as a great step towards enhancing the depth of the market in a way that reflected positively on the trading activity. During 2016, a new brokerage company “Tradeline Securities” joined Bahrain Bourse as one of the licensed brokers at the Bourse.
This year, a unique achievement has been made by transferring the paper share certificates of all listed companies at Bahrain Bourse to electronic records and depositing them in the Bourse's Central Depository System. Consequently, Bahrain Bourse’s CSD services rating by Thomas Murray was upgraded to: AA-, Flash Impact: “Positive”. This upgrade enhances Bahrain Bourse’s investment position and its credibility among portfolio managers on the regional and international level, and contributes to attracting more investments to the shares market.
Bahrain Bourse’s new website was launched providing enhanced services to investors which included an interactive interface that provides comprehensive trading information to issuers of securities, investors and market data providers.
As part of Bahrain Bourse’s vision of strengthening relations between capital markets and bourses to activate and facilitate the exchange experience and expertise, Bahrain Bourse signed an MOU with the Egyptian Exchange at the Arab Republic of Egypt with the presence of the Minister of Industry, Commerce, & Tourism H.E. Zayed bin Rashid Alzayani. The MOU aims at facilitating double entry process between the two bourses, as well as cooperation in enhancing the technological infrastructure and informatics for the Bahrain Bourse to contribute to facilitating the flow of investment between the two countries.
Moreover, Bahrain Bourse has enhanced its focus in the area of trading training skills by expanding the “TradeQuest” Program to include a larger number of government schools, private schools, and universities. It is worth noting that the TradeQuest Program is one of the biggest awareness programs targeting students in the region. In addition, a monthly awareness quiz was also launched to the public. Bahrain Bourse has also extended its social media outreach to the public, and conducted several awareness workshops and seminars for employees in government and private institutions which contributed to spreading awareness on the concept of investment and saving among participants.
Bahrain Bourse’s financial performance for 2016 totaled BD2,917,421 in revenue compared to BD2,843,480 in 2015, while the total expenses reached BD3,765,016 in 2016 in comparison to BD3,864,377 in 2015. BHB recorded a deficit of BD847,595 as compared to a deficit of BD1,020,897 in 2015.
The Bourse’s total assets decreased to BD7,640,717 compared to BD8,522,869 in 2015, while the total liabilities in 2016 were BD427,134 against to BD461,691 in 2015. Shareholders’ equity also decreased from BD8,061,178 in 2015 to BD7,213,583 in 2016.
On behalf of myself and Bahrain Bourse’s employees, I would like to express my sincere thanks and gratitude to His Majesty King Hamad bin Isa Al Khalifa, and to His Royal Highness Prince Khalifa bin Salman Al Khalifa, Prime Minister, and His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince, Deputy Supreme Commander and First Deputy Prime Minister of the Kingdom of Bahrain for their continued support for the Bourse and its members.
I would also like to express my thanks and appreciation to the previous Chairman and members of BHB’s Board of Directors for their efforts in developing the Bourse and their support during their membership. I also thank the Bourse’s management and employees for their dedication and hard work, wishing them greater success in developing the Bourse and achieving its vision, mission, and objectives in the coming period. I would also like to extend my thanks to the listed companies and brokerage firms for their support and cooperation.
Sh. Khalifa bin Ebrahim Al-Khalifa
Chief Executive Officer