The year 2018 was a challenging year for the global stock markets, where the performance of the markets recorded the sharpest declines since the World Financial Crisis in 2008 due to various economic and political factors. Similarly, the majority of the GCC financial markets’ and Bourses’ performance decreased with an evident decrease in the oil prices. Despite that, Bahrain Bourse closed the year with a slightly positive performance with Bahrain All Share Index closing at 1,337.26 points in Dec. 2018 to report an increase of 0.42% compared to its closing in 2017, while Bahrain Islamic Index closed at 823.10 points, decreasing by 24% compared to its closing in December 2017. Trading volume stood at 1.441 billion shares representing 28% YoY increase, and trading value for the year stood at BD 323 million representing 53% YoY increase, with an average daily trading value of BD1.31 million. The number of transactions conducted stood at 19,225 transactions executed in 2018.
During the year, our main strategic focus remained on cultivating opportunities aimed at facilitating issuer and investor access. In summary, our strategic objectives remain the same – to provide a unique suite of listing, trading, and settlement & depositary services to all stakeholders through and efficient capital markets platform and facilitate innovative capital raising opportunities.
This year marked the listing of APM Terminals Bahrain (‘APMT’), a key player in Bahrain’s logistics and supply chain industry, following a successful overall oversubscription resulted from funded applications of 5.4 X the offer size. The IPO was supported by the newly developed eIPO platform, an online subscription platform launched by Bahrain Clear in conjunction with the Initial Public Offering (IPO) of APM Terminals Bahrain, the solution provides users with a seamless and convenient mechanism for completion of online IPO subscription applications. The eIPO platform proved its success to comprise 55% of total subscription applications and 90% of the volume of APM Terminals Bahrain IPO. The listing of the APMT goes in line with BHB’s efforts to enhance Bahrain Bourse’s liquidity and depth, thereby strengthening its competitiveness and attracting local, regional and international investors.
On the fixed income side, the number of listed bonds/ sukuk as of 31st December 2018 reached 15 issues with a total value of US$7.34 billion, and 6 T-Bill issues with a total value of BD 535 million. On the regulatory front, Bahrain Bourse announced the completion of its public consultation on the ‘Listing Rules’ in the first half of 2018, with positive feedback received from various market stakeholders & participants prior to the implementation of the new Listing Rules, which aims to adopt best in class market & regulatory best practices.
On the investment awareness and corporate social responsibility level, 2018 marked the 20thof anniversary of the TradeQuest Program, whereon the annual ceremony was held under the patronage of the Minister of Industry, Commerce, & Tourism and in the presence of the Governor of the Central Bank of Bahrain H.E. Rasheed Al Maraj and the Chairman of Bahrain Bourse Mr. Abdulkarim Bucheery to honor sponsoring institutions and participating students across the three categories of the program (Gov. Schools, Private Schools, and Universities). The ceremony was attended by more than 600 attendees, and a total of BD 30,000 cash rewards to the top finalists was awarded.
Bahrain Bourse continued its efforts to raise financial literacy awareness among various age groups, and this year it has complemented its awareness programs by targeting the elementary students through the launch of the Smart Investor Program in collaboration with INJAZ Bahrain for the academic year 2018-2019. The program aims to equip students with smart financial planning tools. On the first year of its launch, the Smart Investor Program has been implemented across 61 schools and targeted more than 5,500 students within Grade 4 elementary level.
Further, as part of Bahrain Bourse’s continuous efforts to strengthen its ties with listed companies, a number of events/workshops were organized to update listed companies of new developments within Bahrain Bourse. The events included CEO Roundtable which aims to offer a platform for open discussion & cooperation between the exchange and the listed companies. An Investor Relations Awareness seminar was also conducted in collaboration with Middle East Investor Relations Association (MEIRA) to promote the development of the Investor Relations (IR) function and corporate governance best practices across listed companies. In addition, Bahrain Clear held its first awareness session targeted towards issues to debrief attendees on the various value offerings of Bahrain Clear covering both pre-IPO and post trade services currently offered to issuers.
In line with BHB’s strategic objective of ‘Enhancing Market Literacy & Investor Protection’, Bahrain Bourse launched the myShare’ card in collaboration with Al Salam Bank- Bahrain, as part of its strategy to provide investors and listed companies with quality services and efficient solutions. The solution aims to efficiently manage cash dividend distributions on behalf of listed companies. This pioneering service goes in line with Bahrain Clear’s (a fully-owned subsidiary of Bahrain Bourse) efforts to enhance post trade services to better meet investors’ & issuers needs alike.
Furthermore, Bahrain Bourse has been proactive in cultivating innovative advances with the launch of BHB’s mobile application, which allows investors to have access to real-time market data via smart devices enabling informed investment decisions and with the ultimate goal of enhanced market penetration of retail investors and boost market liquidity over time
Throughout the past 12 months, the Bourse expanded its Bahrain Trade network of participating banks and financial institutions to include two additional participants, bringing the total number of participating banks to three including Khaleeji Commercial Bank, BBK and NBB. Bahrain Bourse also expanded its Bahrain Trade Service Providers base through partnering with SICO to provide SICO LIVE online trading solution, enabling clients of retail banks to trade on the Bourse via Bahrain Trade platform.
Bahrain Bourse continued its support to growth companies by widening the number of advisory service firms available and welcoming onboard two additional companies as Authorized Sponsors in the Bahrain Investment Market (Almoayed Chambers and Grant Thornton Abdulaal) in order to assist companies in listing by ensuring all prelisting requirements and post-listing documentation and disclosures are continuously met.
As for the financial performance of Bahrain Bourse in 2018, operational efficiency remains key in today’s market conditions. BHB reported a slight increase in its gross revenue by 0.75% from BD3,062,139 in 2018 compared to BD3,039,480 in 2017, while the total expenses during the year decreased by 24%, from BD4,544,982 in 2017 in comparison to 3,455,220 in 2018. BHB recorded a deficit of BD393,081 in 2018 as compared to BD1,505,502 in 2017. In addition, Bahrain Bourse reported positive earnings before interest, taxation, depreciation, and amortization (EBITDA) of BD128,448 in 2018 compared to BD915,016 EBITDA loss in 2017.
BHB’s total assets decreased to BD5,692,150 compared to BD6,302,569 in 2017, while the total liabilities in 2018 were BD492,538 against BD594,488 in 2017. Shareholders’ equity also decreased from BD5,708,081 as of 31st December 2017 to BD5,199,612 as of 31st December 2018.
On behalf of myself and Bahrain Bourse’s employees, I would like to express my sincere thanks and gratitude to His Majesty King Hamad bin Isa Al Khalifa, and to His Royal Highness Prince Khalifa bin Salman Al Khalifa, Prime Minister, and His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince, Deputy Supreme Commander and First Deputy Prime Minister of the Kingdom of Bahrain for their continued support for the Bourse and its members.
I would also like to express my thanks and appreciation to the Chairman and members of BHB’s Board of Directors for their efforts in developing the capital markets and their continuous support. I also thank Bahrain Bourse’s management and employees for their dedication and hard work, wishing them greater success in further developing Bahrain Bourse and achieving its vision, mission, and objectives in the coming period. I would also like to extend my thanks to the listed companies and brokerage firms for their support and cooperation.
Sh. Khalifa bin Ebrahim Al-Khalifa
Chief Executive Officer