Capital markets
The Bahrain Stock Exchange (BSE) established in 1989 is recognized as the most open capital market in the GCC region. 52 companies (Source: Bahrain Stock Exchange, 11th June 2008, Press Release). 19 bonds (both conventional and Islamic) and 42 mutual funds are currently listed on the Exchange (Source: Central Bank of Bahrain, July 2008). As at December 2007, market capitalization of the Exchange stood at US$27.6 billion, an increase of 30% on the 2006 total (Zawya, June 2008).
There are 14 brokers active in the market and day to day activity takes place through automated trading system (ATs) (Bahrain Stock Exchange, July 2008). The clearing, settlement and Central Depository System are also automated. A framework of sound risk management and internal controls are in place.
Bahrain’s capital market is under the regulation and supervision of the Central Bank of Bahrain’s (CBB) Capital Markets Supervision Directorate which overseas both primary and secondary markets. The Bahrain Stock Exchange (BSE) is a self regulatory organization and front line regulator of the issuers listed on the BSE. The BSE is a licensee and under the supervision of the CBB.
The Government has sought to promote Bahrain’s domestic debt market through the regular issue of government securities:-
I. Sukuk Al Salam Islamic bonds are issued on a monthly basis
II. Sukuk Al-ljara short term Islamic leasing bonds are issued on a monthly basis
III. Government Treasury bills are issued weekly and monthly