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BAHRAIN STOCK EXCHANGE - BSE

History

The State of Bahrain has always been an important financial and banking center, both in the Gulf region and internationally. It has a strategic geographical position as well as an open market economy with dynamic economic policies.

 

The Bahrain Stock Market goes back to 1957 when the National Bank of Bahrain was made public as the first Bahraini Joint Stock Company. With the establishment of some other companies, “Al Jawahara Stock Exchange” began to emerge as an unofficial stock exchange, which continued until 1987.

 

The Bahrain Stock Exchange (BSE) was established in 1987 by a Legislative Decree Number 4 followed by a Ministerial Decree Number 13 in 1988 (the By-Law). These decrees formed the framework of future development and formal functioning of the Stock Exchange which was officially inaugurated on June 17, 1989. Foreign Investors from more than forty nationalities have traded on the Stock Exchange since its inception, comprising between 18% and 25% of the total share value traded from 1991 to 1995. Since its inception, the BSE has taken several steps to broaden and deepen the capital market in the regional and international equities, bonds, mutual funds, Islamic finance instruments and derivatives.

 

Bahrain Securities Market signed on December 25, 1996 a cross listing agreement with the Oman and Kuwait Stock Exchanges. The accord was a first step towards creating a unified Gulf Stock Market.

 

Stock Exchange Board of Directors

Stock Exchange Board of Directors

  • One member representing the Ministry of Commerce, who is the Deputy Chairman;

  • One member representing the Ministry of Finance and National Economy;

  • One member representing the Bahrain Monetary Agency;

  • Three members elected by the Bahrain Chamber of Commerce and Industry, from among experienced and competent individuals; and

  • Two members selected by the Chairman, to represent national banks and auditing firms.

The Directors are appointed by a Prime Ministerial Edict, on the nomination of the Minister of Commerce, for a renewable term of

Traded Securities

Major instruments that could be traded on Bahrain Stock Exchange include Ordinary or Common Shares, Bonds or Debt Instruments, Mutual Funds and Currency Warrants.

Abu Dhabi Securities Market (ADSM)

Abu Dhabi Financial Market was established in accordance with Law Number (3) for the Year 2000. It gives the Stock Exchange Market independent legal personality, financial and administrative independence, as well as the necessary control and executive powers required by the Market to discharge its functions. The Market was officially inaugurated on 15th November 2000. It works towards securing financial and economic stability and the development and rationalization of exchange methods in such a manner as to ensure market liquidity and stability. Management of the Stock Market consists of nine members who are appointed by a Presidential Decree issued by the Emir of the U.A.E. They are appointed for a three-year term.

Type of Transactions

The Stock Exchange classifies three types of trading transactions, according to their value. These are:

    Fraction Transactions

    where the market value does not exceed BD 1,500/- or the equivalent in foreign currencies. These deals are allocated for small investors.

    Main Transactions

    where the market value is equal or above BD 1,500/- or the equivalent in foreign currencies.

    Block Trading

    where the market value exceeds BD 30,000/- or the equivalent in foreign currencies. Such transactions must be transacted by one person only.

 

Clearing and Settlements System

The Settlement used in the Stock Exchange require that the relevant share certificates be delivered, against payment, within two business days after completing a transaction. This is done by the stockbroker who handled the relevant sale and purchase. The Clearing and Settlement Unit at the Stock Exchange oversees the exchange of certificates and money.

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