ANNUAL REPORT JUNE 2010
FEDERATION OF EURO-ASIAN STOCK EXCHANGES
BAHRAIN STOCK EXCHANGE
During 2008, BSE implemented its strategic
plan in which it upgraded its technical
capabilities, allowing the Exchange to
launch its online trading service to brokers.
Rasheed Mohammed Al-Maraj
Chairman
The global financial crisis that began with the
mortgage crisis in the U.S. has severely
affected the performance of bourses and
financial markets worldwide, triggering sharp
declines in indices compared to the gains
recorded in the previous years.
The indices of GCC and Arab financial
markets along with Bahrain Stock Exchange
were apparently affected by the crisis to
reflect the interrelation between financial
markets worldwide.
The performance of Bahrain All Share Index
in 2008 was not any different than the other
indices of bourses, Arab and financial
markets. The index posted negative growth
of 34.52% during 2008 compared to 2007
although the trading activity was
unprecedented in terms of the value and
volume of shares traded, and the number of
transactions executed throughout the year.
During 2008, BSE implemented its strategic
plan that was approved in 2007 in which it
upgraded its technical capabilities, allowing
the Exchange to launch its online trading
service to brokers. Moreover, BSE developed
the Exchange’s Settlement and Central
Depositary services with the aim of
facilitating investors’ transactions and
allowing them to perform most of their
transactions through the Exchange’s
website. In implementing BSE’s strategy,
HISTORY AND DEVELOPMENT
It was back in 1920 that the first branch of a
commercial bank, Standard Chartered Bank,
formerly known as Eastern Bank, opened its
doors in Bahrain, the first to do so in the
region in order to facilitate the business
community at that time. By 1957, Bahrain
had its first public shareholding company –
the National Bank of Bahrain. However, it
was not until the late 1970s and early 1980s
that Bahrain realized there was a growing
need for an organized stock market, due to
the growth provided by the oil price boom in
the region.
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BSE in cooperation with the Central Bank of
Bahrain listed several mutual funds on the
Exchange during the year.
Shaikh Salman bin Hamad Al Khalifa, Deputy
Supreme Commander and Chairman of the
Economic Board (EDB), honored the signing
ceremony held in Singapore by his
presence, where a consultancy agreement
between BSE and Singapore Exchange
(SGX) was signed. The MoU mainly aims to
foster a closer relationship and develop
channels of information exchange in the
areas of operations, regulatory framework,
and the equities products traded on the
respective markets.
In addition, BSE has taken a strategic move
towards developing the Exchange by signing
a consultancy agreement with Singapore
Exchange (SGX). According to this
consultancy agreement, SGX will provide
detailed recommendations to BSE for the
purpose of enhancing BSE’s
competitiveness both regionally and
internationally.
In regards to BSE’s relocation to Bahrain
Financial Harbor, the project’s manager has
been appointed and BSE’s offices are near
completion. The Exchange is expected to
fully commence its operations and provide
its services from its new premises in the
second half of 2009.
As a result, the Government, in cooperation
with the International Finance Corporation
(IFC), prepared a feasibility study
highlighting the importance of establishing
an official stock market in Bahrain. In 1987,
Bahrain Stock Exchange was established
following the issuance of Amiri Decree No.
4, and officially commenced operations on
17th June 1989.
BSE’s financial results for the year 2008, as
included in the budget of this report, showed
that the Exchange has reported positive
results for its third consecutive year. It
recorded a surplus of BD 1,284,338
compared with BD 901,334 in 2007, posting
a growth of 42.49%. The accumulated
surplus also increased to reach BD
3,950,112 compared to BD 2,665,774 in
2007 recording a growth of 48.17%.
On behalf of the members of the Board of
Directors of BSE and BSE’s 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 Highness Shaikh Khalifa bin Salman Al
Khalifa, the Prime Minister, and His Highness
Shaikh Salman bin Hamad Al Khalifa, the
Crown Prince and Deputy Supreme
Commander for their guidance and
continuous support of BSE.
I would also like to extend my thanks to the
members of BSE's Board of Directors for
their efforts in developing the BSE during the
previous years. I would also like to thank
BSE’s management and staff for their hard
work during the year, hoping that such efforts
will continue to further develop the
Exchange.
FUTURE OUTLOOK
In the year 2009, the BSE will continue its
efforts to attract more local, regional, and
international mutual funds despite the global
financial crisis. The BSE will also seek more
cooperation with stock exchanges
worldwide, with the aim of exchanging
information and expertise. The BSE will also
continue to attract more listed companies,
both local and international.