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Bahrain Bourse launches region’s first Islamic finance index

As part of Bahrain’s efforts to enhance its leading position in Islamic finance, the Bahrain Bourse has introduced a trading index of Shari’ah-compliant companies.
The new initiative will enable investors, brokers and advisors to take better-informed investment decisions by tracking the performance of companies’ stocks listed on the index, and by using trading bulletins issued by the Bourse.
Initially the index will include the shares of 17 companies, all of which comply with the technical and financial standards set by the Bourse’s Sharia’h committee. According to Khalid Hamad Al Hamad, Executive Director of Banking Supervision at the Central Bank of Bahrain (CBB), the new venture will encourage Islamic banks and other companies “to take new initiatives in the capital market, through mutual funds and securities that comply with the Islamic Shari’ah”.
Bahrain’s regional and international leadership
With over 40 years’ experience, Bahrain is the GCC’s longest-established financial services centre. Through the CBB, the Kingdom has firmly set the standard in creating a transparent regulatory environment for the whole sector.
Today, Bahrain is recognised as the global leader in Islamic finance – pioneering many popular financial instruments, such as the sukuk bond, guiding other countries on setting up their own Islamic finance structures, and having the greatest concentration of Islamic finance institutions anywhere.
Bahrain Bourse: a strong record of success
Since taking over from the Bahrain Stock Exchange (BSE) in 1989, the Bahrain Bourse has forged a reputation for trust and innovation.
It is a member of important regional and international organisations such as the Union of Arab Stock Exchanges, Federation of Euro-Asian Stock Exchanges (FEAS), World Federation of Exchanges (WFE), Africa & Middle East Depositories Association (AMEDA) and Association of National Numbering Agencies (ANNA).
Implementation of an electronic Automated Trading System (ATS) in 1999, and the transfer of regulatory supervision to the CBB in 2001 allowed the Bourse to develop decisively. Government institutions and businesses were able to take advantage of a rigorous legislative and technical infrastructure and issue investment instruments. Subsequently, the Bourse was the first in the region to list and register preferred shares, bonds, sukuk and mutual funds.
A move to Bahrain Financial Harbour in 2010 enabled the Bourse to introduce the very latest technology in order to provide leading-edge services for clients. And the advances continue: in September 2015, as well as creating the new Islamic finance index, the Bourse listed its first REIT (Real Estate Investment Trust), the second only such Shari’ah-compliant instrument in the Gulf*.
*A listed REIT is a regulated vehicle that invests directly in real estate, and its units can be traded like shares. Most significantly, it is accessible to all kinds of investors.