MANAMA: Bahrain Bourse (BHB) will eventually be transformed into a profitable corporate enterprise with public shareholding, it has emerged.
The stock exchange’s chief executive Shaikh Khalifa bin Ebrahim Al Khalifa told a Press conference at its office yesterday that the bourse will not be dependent on government grants by next year and the medium-term plan is to go for market flotation via an initial public offering (IPO).
“We have managed to reduce the annual government grant from BD2.5 million a few years ago to BD250,000 this year and we will not need it next year.
“BHB expects to start making a profit this year or the next, which is a pre-requisite for listing.”
Bahrain Bourse will also fully undertake its role as a self-regulatory organisation (SRO) during the first quarter this year, he added.
In 2018, Bahrain Bourse plans will be focussed on introducing a number of innovative products and services including new post services for Bahrain Clear, inclusion of more financial institutions in the Bahrain Trade Network, kick-off of the Smart Investor Programme and issuance of new listing rules.
Reviewing performance, the chief executive said 2017 was exceptional on many fronts, with a performance ranking second among GCC stock exchanges, and fourth in the Mena region.
The Bahrain All Share Index ended the year on 1,331.71 points up 9.12 per cent year-on-year (YoY).
The total volume of shares traded in 2017 was 1,129,826,742, representing 53pc YoY increase and the total value traded was BD211 million, 70pc higher than the previous year.
BHB’s market capitalisation as of end-2017 was BD8.146 billion, an increase of 12pc over end-2016.
“From our achievements in 2017, it is clear we have made progress on various fronts, as we continue to adopt more initiatives and innovation-led technologies to enhance liquidity and depth of the market in a way that will leverage its competitiveness to attract local, regional, and international investors,” added Shaikh Khalifa.
In 2017, Bahrain Bourse achieved major advancement on a number of operational fronts including: listing of the first REIT (Eskan Bank REIT), operationally launched Bahrain Investment Market and authorisation of four sponsors on the market including Keypoint, KPMG, BDO, Sico and strategic tie-up with Tamkeen to fund growth companies interested to list on the market.
In terms of operational budgets, the bourse was able to reduce general and administrative costs by 40pc last year without any impact on the main operations, and simultaneously increase revenues by 100pc.
The year also saw two bonds/sukuk get listed taking the total to 13 with a total value of $6.084bn, as well as 41 T-bills with a total value of BD2.6bn.
On the regulatory front, the Bahrain Bourse obtaining approval from the Central Bank of Bahrain on market making rules meant that Mubasher could commence market making services.
On the technological front, the trading platform saw a major upgrade of its X-stream trading system to meet the needs of capital market participants in general, and investors in particular.
In addition, BHB’s e-services were launched on Bahrain eGovernment portal to all investors and stakeholders, allowing registered investors to view their investment portfolios and details of their securities’ transactions in a timely and easy manner.
BHB chairman Abdulkareem Bucheery said: “The developments achieved in 2017 are a positive step in the advancement of the capital markets sector as a whole, and reflects Bahrain Bourse’s strategic positioning that positively enhances the development of the capital markets sector and bolsters the economy of Bahrain.”