Chairman Message

Bahrain Bourse (BHB), and Bahrain Clear (BHC) (a fully-owned subsidiary of Bahrain Bourse) continued its efforts in 2019 on the successful implementation of its strategic roadmap 2016-2020 to end the year 2019 with remarkable legislative, administrative and technical achievements and tangible results while achieving the 2nd best performance across GCC markets (20.41%) and a growth in market capitalization by 23.6% to BD10.13 billion.

Operational & Legislative Enhancements

In terms of operational developments, Bahrain Bourse implemented the new tick size framework which aims at enhancing market liquidity and providing more opportunities to investors to go in line with the implementation of international standards & global practice. The new tick size framework has been designed to achieve various objectives, mainly to mitigate investors risk in the event of price drops and limit excessive disruption to market volatility by allowing investors to place orders with smaller fractions. Furthermore, Bahrain Bourse has also successfully revamped its fees & commission model to be in line with regional standards.

Stakeholder engagement on key framework enhancements is critical to our business and its operations. Hence, on the legislative front, Bahrain Bourse issued a consultation paper on the implementation of the administrative fines framework on issuers in the event of non-compliance with the Listing Rules and any other applicable BHB rules, regulations and directives as deemed appropriate. The administrative fines framework aims at enhancing issuer disclosure standards and transparency in the market and to ensure investors protection. In addition, Bahrain Clear, a fully-owned subsidiary of Bahrain Bourse, issued a consultation paper on the Delivery Versus Payment (DVP) Model Framework intended to enhance the market infrastructure and ensure its alignment with international standards and mitigates one of the main risks outlined by regional and international investors.

Technology Adoption

BHB is constantly working to improve technologies and provide modern and convenient services to its investors and various stakeholders. As part of BHB’s digital transformation efforts, Bahrain Bourse started migrating to Amazon Web Services (AWS) to enable BHB to deliver its services more efficiently to all stakeholders, and therefore increase its competitiveness at a global level. Bahrain Bourse also embarked on various digital transformation projects within its efforts to enhance cost efficiency in order to streamline its business processes to benefit investors, issuers, and stakeholders.

Similarly, Bahrain Clear in cooperation with “BENEFIT” launched the electronic payment “Fawateer” to enable investors, brokers, custodians and issuers to pay all outstanding fees and commissions of all services provided by Bahrain Clear in a seamless and secure manner.

On the administrative front, Bahrain Bourse focused on various initiatives aimed at developing its organizational talent and cultivating a culture focused on professionalism, diversity, and ongoing professional development in line with market requirements.

Listings

2019 marked the listing of the first company on the Bahrain Investment Market “Sprinkle Holding BSC (closed)”, a specialized FinTech company.   Bahrain Bourse looks forward to welcome future listings on the BIM in the coming years, as we further accelerate our efforts to attract a larger number of growth companies to the market. BHB also remained active in terms of its debt and T-Bills listings with a total value of BD2.68 billion on the Bonds/Sukuk Market, and total value of BD2.27 billion on the T-Bills Market throughout the year.

Awards

This year, Bahrain Bourse was recognized as the first semi-government entity to receive the ‘Thiqa’ award Level 3 during the Information Security Forum ‘Thiqa’ (Trust) 2019 organized by the Information & eGovernment Authority (iGA).  The recognition proves Bahrain Bourse’s effective approach and commitment to the implementation of the international standards and best practices in information security.

Stakeholder Engagement

As part of its endeavor to attract international investments and strengthen links between listed companies and institutional investors, Bahrain Bourse participated in two roadshows, in Dubai and Luxemborg.  Both roadshows enabled BHB to actively engage with international investors and fund managers to highlight and showcase the opportunities available in Bahrain’s capital market.  Bahrain Bourse embarked on a new initiative during the year by collaborating with the Middle East Investor Relations Association (MEIRA) to establish the Bahrain Chapter to further develop and enhance best practices in Investor Relations (IR) across the Kingdom of Bahrain.

Bahrain Bourse plays a key role in the market which it operates and the wider community and the wider community that it serves. Hence, BHB has embarked on a sustainability drive to highlight the importance of Environmental, Social, Governance (ESG) reporting and disclosure standards to build a better and a more successful and sustainable business. BHB officially joined the United Nations Sustainable Stock Exchanges (SSE) initiative to demonstrate its voluntary commitment to promoting sustainable and transparent capital markets in cooperation with listed companies and other related stakeholders.  Under this umbrella, Bahrain Bourse hosted a bell ringing ceremony to promote “Gender Equality” and empower women in the capital markets sector.  Similarly, Bahrain Bourse also hosted a bell ringing ceremony to demonstrate its commitment towards enhancing “Financial Literacy” and investment awareness through various programs and initiatives that grew over the years.

Financials

Looking into Bahrain Bourse’s financial performance in 2019, BHB’s gross revenue increased from BD 2,671,494 in 2018 to BD 3,120,239 in 2019 reporting an increase of 16.8%. Bahrain Bourse reported a deficit of BD 498,393 in 2019 compared to BD 393,081 in 2018.  Shareholders’ equity decreased from BD 5,199,612 as of 31st December 2018 to BD 4,701,219 as of 31st December 2019.

Looking Forward

This year marks Bahrain Bourse’s 30th Anniversary since the exchange was formally established. Our track record over the past 30 years has provided us with a strong and deep foundation within the capital markets. As we gear up for further growth, we look forward to the next 30 years to help us build scale, capture unique opportunities across multiple asset classes, and serve our investor needs more holistically.

Acknowledgements

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.

I would like to also thank our issuers, investors, and members and custodians, and stakeholders for their continued support and confidence as we look forward to another year of key milestones achieved in the coming year. Most importantly, the employees of Bahrain Bourse and Bahrain Clear behind this entire operations, who are our most important assets.  As we look forward to the next chapter of growth, we will continue to scale up our business and further diversify our asset classes to create a seamless and efficient marketplace for all our stakeholders.


Abdulkarim Ahmed Bucheery

Chairman of Bahrain Bourse and Bahrain Clear