FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
BAHRAIN BOURSE
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.
Yusif Humood
Chairman
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,
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 first Bahraini Public Shareholding Company
was established in 1957. 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”. Such market soon collapsed
along with the collapse of the Souk Al-Manakh
stock market crash in Kuwait at the beginning of
the 80’s of the last century.
Following the crash, the Bahraini Government
in cooperation with the International Finance
Corporation (IFC) prepared a feasibility study to
establish an official stock market in Bahrain. As
a result of the recommendation of the study, the
Bahraini Government established Bahrain Stock
Exchange in 1987 according to Amiri Decree
No. 4. The Exchange officially commenced
operations in June 1989 with 29 Bahraini
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
shareholding companies listed. The only
instruments traded at that time were common
shares.
Since the bourse’s establishment in 1989
(formerly Bahrain Stock Exchange), trading was
conducted manually through a system called
“Auctional Trading” System. Using this system,
the broker had to write the bid and offer orders
that they receive from the investor on the trading
boards at the trading floor. The transaction takes
place when the bid and offer prices match.
In 1999, BHB implemented the Automated
Trading System (ATS) to carry out all the
bourse’s transactions electronically, replacing
the old manual system.
In 2002, the legislative and 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 bourse’s activities.
With the development of the bourse,
government institutions and companies started
issuing several investment instruments taking
advantage of the legislative and technical
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.
infrastructure established by the bourse. Since
then, the bourse witnessed the listing and
registration of preferred shares, bonds, sukuk,
and mutual funds, making it the first bourse to
list such instruments in the region.
In 2010, Bahrain Bourse moved to its new
premises at Bahrain Financial Harbour after
preparing the new premises with the latest
technological equipment in order to support
the bourse’s efforts to provide a variety of
advanced services that satisfy issuers, brokers
and investors.
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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