Chairman Message

Throughout 2018, Bahrain Bourse (BHB) and its fully-owned subsidiary, Bahrain Clear, continued to embrace technological and operational changes to strengthen its foundation, develop new products and services for investors, and position Bahrain Bourse for future growth. The year 2018 marks an important chapter in the history of Bahrain Bourse as we rolled out an electronic subscription platform for IPOs (eIPO), which marks a pivotal milestone in terms of digital transformation. This has laid a solid foundation for our vision of becoming a regional multi-asset class marketplace leader and created a platform impetus and expand our investor base.

Bahrain Bourse has worked closely with regulators to improve the robustness and resilience of our market, integrate contemporary technologies, and adopt new regulations, as we have sought our stakeholder’s feedback on the proposed draft Listing Rules. The draft Listing Rules have been introduced as part of BHB’s efforts to implement a Self-Regulatory Organization (SRO) model.

On the trading front, the statistics have been in line with expectations in terms of trading values and volumes despite global market downturns, with trading volume showing an increase representing 28% YoY, and trading value showing an increase of 53% YoY, with daily average trading value at BD1.3 million. The Bourse’s focus remains on enhancing profitability and sustainable growth in order to create maximum value for our shareholder.

On 9th December 2018, Bahrain Bourse welcomed the listing of APM Terminals Bahrain (‘APMT’). The listing of APMT on Bahrain Bourse marks an important milestone towards achieving our strategic objectives in terms of attracting new issuers from fast growth economic sectors and expanding the Bourse’s investor base. APMT became the first IPO issuer listed on BHB to utilize Bahrain Clear’s newly developed eIPO platform. The IPO was met with strong retail & institutional demand resulting in an oversubscribed offer with funded applications of 5.4 multiples. Over the past year, BHB has listed a growing number of debt products with 15 bonds/sukuk listed as of 31st December 2018 at a total value of US$7.34 billion.

Encouraging the adoption of best practice standards is an important part of BHB’s role as a responsible marketplace. Hence, in 2018, BHB signed an MOU with Middle East Investor Relations Association (‘MEIRA’) to encourage and assist listed companies in adopting best practices in Investor Relations in order to meet the growing expectations of the international investment community.

Bahrain Bourse aims to maintain an ongoing dialogue with its market participants, a key feature determining the success of our market. With that in mind, we have created an open platform for discussion with CEOs of listed companies through our regular ‘CEO Luncheon’ in order to adapt to changing market conditions and help us meet various expectations of listed companies as well market participants.

BHB executive management sees its role in the regional and international arena as conducive to promoting the Kingdom’s capital market. Regionally, BHB has continued to cooperate closely with GCC-based stock exchanges & clearing houses to further advance the capital markets and enhance connectivity. This has been evident with the signing of Cooperation Agreement with Muscat Clearing & Depository to facilitate investor access in both markets.

In order to create awareness and boost financial literacy, we have partnered in recent years with the BIBF to educate investors through the Investment Academy. Our long-term objective through these seminars is to enhance penetration of retail investors in the market. Furthermore, our launch of the ‘Smart Investor’ program, in collaboration with Injaz Bahrain, has been successful with more than 5,500 students benefitting from the program.

Looking into Bahrain Bourse’s financial performance in 2018, BHB’s gross revenue increased from BD3,039,480 to BD3,062,139 reporting an increase of 0.75%. Bahrain Bourse reported a deficit of BD393,081 in 2018 compared to BD1,505,502 in 2017. In addition, Bahrain Bourse reported positive earnings before interest, taxation, depreciation, and amortisation (EBITDA) of BD128,448 in 2018.

Bahrain Bourse’s journey will continue in accordance to the pre-set five-year strategic roadmap (2016–2020). In 2019, BHB aims to focus on sustainable development based on innovation and technology to meet the growing issuer & investor needs and to enhance efficiency of all our work aspects with a long-term vision focused on the creation of a strong and diversified marketplace by 2020 with active participation from its stakeholders.

On behalf of myself and Bahrain Bourse’s Board of Directors and Management team, I would like to express my thanks and sincere appreciation 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, Deputy Supreme Commander and First Deputy Prime Minister of the Kingdom of Bahrain for their guidance and continuous support to Bahrain Bourse, as well as their efforts to support the prosperity of the country in various areas.

I would also like to thank H.E. Zayed bin Rashid Al-Zayani, the Minister of Industry, Commerce, and Tourism (the ‘Shareholder’) for his continuous support extended to Bahrain Bourse in its various initiatives and programs. I also would like to thank the Chairman and Board Members of the Central Bank of Bahrain (CBB), and the Governor of the CBB H.E. Rasheed Mohammed Al-Maraj for their ongoing support to Bahrain Bourse.

On behalf of the Board of Directors, I would like to express our gratitude to our issuers, investors, members, and stakeholders for their continued support & confidence as we look forward to another year of key milestones achieved in the coming year. I would also like to thank all of our employees for continuous commitment, strong teamwork, and valuable contributions. Looking ahead, we will continue work towards a seamless & efficient marketplace for all our stakeholders.

 

Abdulkarim Ahmed Bucheery

Chairman