The Bahrain Bourse has marked its fifth consecutive year of growth, with the All Share Index closing 2025 above the psychological 2,000-point barrier.
Analysis by Kamco Invest shows that the index finished last year at 2,066.54 points, representing a moderate annual gain of 4.1 per cent. This follows a marginal 0.7pc increase in 2024, with much of the momentum generated during a robust second half of the year. The market reached its annual peak in late October, touching 2,079.68 points.
Market performance was bolstered by a strong showing in the financials index, the bourse’s largest sector, which surged by 13.1pc. Other top-performing sectors included consumer discretionary (up 10.8pc) and consumer staples (up 8pc).
However, overall growth was tempered by a sharp 15pc year-on-year decline in the materials index. This was driven entirely by Alba, the sector’s sole constituent, which saw its share price drop by
15pc over the year.
Ithmaar Holding emerged as the star performer of 2025, topping the gainers’ list with a massive 111.8pc share price increase. It was followed by GFH Financial Group, which climbed 94.1pc, and Bahrain Car Park, which gained 50pc.
On the losing side, Alba led the decliners, followed by Trafco Group (down 14.5pc) and APM Terminal Bahrain (down 3pc).
Investor appetite saw a dramatic spike during the year. The total value traded on the bourse jumped by a staggering 109.2pc to BD617.7 million, up from BD295.3m in 2024. The total volume of shares traded also rose moderately by 13.8pc to 1,416.8m shares.
The market’s resilience comes despite a challenging year for the kingdom’s sovereign ratings. In February, Fitch revised Bahrain’s outlook to ‘Negative’ citing wide deficits, while in November, S&P downgraded the kingdom’s credit rating to ‘B’ from ‘B+’ due to debt dynamics.
In response to these fiscal challenges, the government has unveiled a comprehensive suite of reforms aimed at strengthening public finances. A major pillar of this strategy includes the introduction of a 10pc corporate profit tax, targeting local companies with annual revenues exceeding BD1m or net profits over BD200,000, with implementation currently set for 2027.
Beyond direct taxation, the measures encompass a broader overhaul of the subsidy and revenue systems, including increased tariffs on electricity and water and the introduction of revised mechanisms for fuel pricing. Additionally, the kingdom plans to boost state coffers through augmented dividends from state-owned enterprises and the imposition of various new fees and taxes.
On the trade front, the outlook remains positive. Official government data revealed that Bahrain’s total exports grew by 5.7pc to BD4.5 billion ($11.9bn) for the first 11 months of 2025, up from
BD4.2bn during the same period last year.
Zooming out, Gulf equity markets significantly underperformed the global rally in 2025, hindered by a sharp correction in Saudi Arabia and a slump in crude prices.
The aggregate MSCI GCC index edged up just 1.6pc for the year, pressured by a 12.8pc decline in Saudi Arabia’s TASI. Riyadh’s retreat — driven by geopolitical tensions and energy sector weakness — made it the only GCC market to end the year in the red. State oil giant Saudi Aramco saw shares slide 15pc.
In contrast, smaller regional markets posted robust returns. Oman’s MSM 30 led with a 28.2pc surge, followed by Kuwait (up 21pc) and Dubai (up 17.2pc).
Abu Dhabi, Qatar and Bahrain recorded modest single-digit gains.
Regional sentiment was dampened by an 18.5pc drop in Brent crude amid oversupply fears. The MSCI GCC index faced heavy volatility, including an 8.2pc tumble in November alone.
Sector performance was sharply divided. While utilities, insurance, and consumer durables plummeted over 30pc, these losses were offset by double-digit gains in the banking, telecom and financial services sectors, which were bolstered by global interest rate cuts.
Despite the muted index growth, underlying indicators remained resilient. Foreign investors were net buyers for the year, supported by a $4 trillion regional project pipeline and steady expansion in the non-oil sector.
avinash@gdnmedia.bh
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