FEDERATION OF EURO-ASIAN STOCK EXCHANGES
SEMI ANNUAL REPORT OCTOBER 2008
BAHRAIN STOCK EXCHANGE
Rasheed Mohammed Al-Maraj
Chairman
2006 was a difficult year for most regional
stock markets, as the excesses of previous
years were followed by sharp falls, in some
cases reaching 50%. These corrections were
inevitable, but a positive development in as
much as they placed these markets on more
sustainable valuation levels.
Bahrain’s experience, in the meantime,
continued to reflect its relatively greater
longevity and maturity. Having previously
escaped the exuberant excesses of some of
its younger regional neighbors, it also escaped
the sharp corrections which followed. In 2006,
the Bahrain All Share Index managed to end
the year with a 1% gain, a reasonable
performance given the backwash from major
falls elsewhere.
Leaving the market context to one side, 2006
was also a year of progress in terms of
developing the infrastructure underpinning the
Bahrain Stock Exchange (BSE). The most
significant development was the passage of
the Central Bank and Financial Institution Law,
which came into effect in September last year.
This law provides a new legal and regulatory
foundation stone for Bahrain’s capital markets.
It enshrines in formal terms the separation of
FUTURE OUTLOOK
In the year 2008, the BSE is planning to take
several initiatives in order to promote trading at
the exchange both on the regulatory and
technical levels. Within these initiatives, the BSE
will introduce online trading and short-selling
and will also develop its clearing, settlement
The Central Bank and Financial Institution
Law, which came into effect in 2007
provides a new legal and regulatory
foundation stone for Bahrain’s capital
markets.
the BSE’s regulatory and business functions, a
separation which was initiated back in 2002.
The BSE will be focusing exclusively on its
business role of providing a listing and trading
platform, whilst the regulation of the Exchange
now firmly rests with the Central Bank. The
new law also provides new statutory offences
of market abuse and insider dealing, powers
which will be fully used to ensure clean and
thus attractive markets to investors and
issuers alike.
The Board’s decision to relocate the BSE to
new premises at the recently opened Bahrain
Financial Harbor promises also to be a
significant milestone. This move, it is believed,
will provide modern infrastructure and a
prominent location for the Exchange,
supporting its efforts to further develop and
expand its operations.
With a new law now passed and new premises
in hand, the focus going forward will be
shifting to implementing various measures
aimed at strengthening the position of the
Exchange.
Efforts will focus on three key areas, namely (i)
facilitating trading on the Exchange to improve
ease of trading by investors wishing to use the
Exchange, including remotely; (ii) improving
the clearing, settlement and depositary
infrastructure that underpins activity on the
BSE, with the objective of enhancing its
competitiveness; (iii) developing the emerging
role of the BSE as the region’s leading
platform for the listing of funds, bonds and
other non-equity products.
On this note, I should like to close by taking
this opportunity to thank His Majesty King
Hamad bin Isa bin Salman Al Khalifa, King of
the Kingdom of Bahrain; His Highness Shaikh
Khalifa bin Salman Al Khalifa, the Prime
Minister, and His Highness Shaikh Salman bin
Hamad Al Khalifa, the Crown Prince and
Commander in Chief of the Bahrain Defence
Force for their valuable support and guidance
as regards the BSE.
My thanks also go to the members of the
BSE’s Board of Directors, as well as to the
management and staff of the BSE, for their
efforts during the past year. I know I can count
on their support during the time to come, as
we collectively strive to develop further the
Exchange. Finally, I should like to thank all
those issuers who are listed on the Exchange
for their cooperation and support with respect
to the BSE’s various projects.
and depositary systems in an effort to enhance
trading procedures at the exchange. The BSE
will also seek to attract more local and GCC
companies to list on the Exchange as well as
Islamic and conventional debt instruments and
mutual funds.
CONTACT INFORMATION
Contact Name Mr. Ali Mansoor
E-mail [email protected]
Website www.bahrainstock.com
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