Global and regional markets experienced a positive rebound in 2021 following another year of economic slowdown due to the repercussions of the COVID-19 pandemic, where GCC economies returned to growth during 2021 by implementing various fiscal measures which was backed up by higher oil prices. As a result, Bahrain Bourse (BHB) ranked fifth amongst GCC bourses and capital markets in terms of yearly returns during the year. Besides the positive market performance, BHB continued its efforts to enhance its competitiveness by focusing its efforts on enhancing transparency and efficiency in Bahrain’s capital market and offering unique growth opportunities. During 2021, Bahrain Bourse made a remarkable step towards enhancing transparency and efficiency in Bahrain’s capital market by adopting the Global Industry Classification Standard (GICS) for listed companies in July. The industrial re-classification aims to establish alignment with global industrial standards for classifying listed companies as adopted by regional and international stock exchanges, which will provide more transparent information to international investors on the performance of sectorial indices and enable easier sectorial comparability and benchmarking analysis against local and global markets.In addition, Bahrain Bourse issued amendments to the Listing Rules with the aim of further strengthening the regulatory oversight on listed companies. The Listing Rules enhancements have been introduced to maintain investor confidence as further administrative powers are imposed on issuers. The amendments include the establishment of the Violations Committee to review and evaluate high-frequency violations and determine penalties to be imposed on listed companies for non-compliance with BHB Business Rules as well as setting the timeframe for settling those violations. The Listing Rules enhancements also include establishment of a Disciplinary Appeals Board to allow listed companies and issuers to appeal on violations imposed.With regards to Bahrain Clear, a fully-owned subsidiary of Bahrain Bourse, the company continued its efforts and outreach to update KYC information and IBAN details to entitled shareholders and distribute annual unclaimed cash dividends based on the Resolution issued regarding establishment of the ‘Amanat’ Investor Protection Funds Program. During the year, more than BD 200 million were distributed as cash dividends for the year ended 31st December 2021 (for companies listed on Bahrain Bourse as well as cross-listed companies), and more than BD 4 million as unclaimed accumulated cash dividends. Bahrain Clear will continue developing its processes and systems to update KYC information in order to distribute accumulated and unclaimed dividends to entitled shareholders.As part of Bahrain Bourse’s efforts to strengthen cooperation ties with GCC capital markets and exchanges and going in line with the government’s financial services sector development strategy 2022-2026 objectives, BHB signed a strategic partnership with Abu Dhabi Securities Exchange (ADX). The partnership aims at achieving synergies and greater cross border cooperation to enhance market liquidity, including direct market access and the issuance of Exchange Traded Funds (ETFs). The partnership will attract new investors and promote a healthy listing deal pipeline to support the growth of capital markets in the region and support the diversification of GCC economies.In line with Bahrain Bourse’s strategy to strengthen links with international investors, Bahrain Bourse and Bahrain Clear participated in a Forum organized by HSBC, with successful participation from global custodians and investors as part of its roadshow outreach. The virtual forum took place alongside the HSBC Markets and Securities Services: MENAT Virtual Forum 2021, one of the largest regional securities forums, and provided Bahrain Bourse and Bahrain Clear with the opportunity to showcase its key regulatory and market developments and plans to investors.
Looking into Bahrain Bourse’s financial performance in 2021, BHB achieved an operating income of BD 3,556,874 (including the operating income and interest income) compared to BD 3,038,940 in 2020 recording a growth of approximately 17% (note that 2020 revenue includes BD 45,120 received as part of Government economic stimulus measures). The total operating expenses reached BD 4,011,884 in 2021, posting a growth of 8% compared to 2020 due to the increase in operating expenses and suspension of government related financial support (received as part of Covid-19 economic stimulus program) to enterprises adversely affected by the repercussions of COVID-19. The deficit declined to BD 455,010 in 2021 compared to BD 659,376 in 2019, reporting a decrease of 31%.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 Salman bin Hamad Al Khalifa, Crown Prince and Prime Minister for their guidance and continuous support to Bahrain Bourse, and their ongoing efforts to support the prosperity of the country.I would like to extend my gratitude to H.E. Zayed bin Rashid Al-Zayani, the Minister of Industry, Commerce, and Tourism (the ‘Shareholder’) for his continuous support extended to Bahrain Bourse and Bahrain Clear in its various initiatives and programs. I would also 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 and all CBB employees for their ongoing support to Bahrain Bourse. I would also like to thank the Board of Directors for the efforts they have put to develop the Bourse during the year.I would like to extend my thanks and gratitude to 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, I thank the talented team of professionals behind Bahrain Clear and Bahrain Bourse, whom have shown strong resilience and adaptability during the pandemic for the second consecutive year.
Abdulkarim Ahmed Bucheery