Bahrain Bourse: A Guide To This Exchange

The Bahrain Bourse, also known as the Bahrain Stock Exchange (BSE) or Bahrain Bourse (BHB), is a self-regulated multi-asset marketplace in Bahrain. Established in 1987 by Amiri decree, the Bahrain Bourse has been a member of the Federation of Euro-Asian Stock Exchanges and has been recognised by other regional and international organisations. The Bahrain Bourse offers a range of exchange-related facilities, including listing, trading, settlement, and depositary services for various financial instruments. As of 2017, 42 companies were listed on the exchange.

History of Bahrain Bourse

The Bahrain Bourse, also known as the Bahrain Stock Exchange (BSE), is a stock exchange based in Bahrain. It was established in 1987 by Amiri decree and began its operations on 17 June 1989 with 29 listed companies. The BSE operated as an autonomous institution supervised by an independent Board of Directors, chaired by the Governor of the Central Bank of Bahrain.

In 2010, Bahrain Bourse (BHB) was established as a shareholding company under Law No. 60 to replace the BSE. Since its inception, the BHB has actively joined several regional and international organisations, including the Union of Arab Stock Exchanges, the Federation of Euro-Asian Stock Exchanges, the World Federation of Exchanges, and the Africa & Middle East Depositories Association. These memberships have strengthened the BHB's position in the global capital markets.

As of 2017, 42 companies were listed on the exchange, and it operates from Sunday to Thursday. The Bahrain Bourse is monitored by three indices: the Bahrain All Share Index, the Dow Jones Bahrain Index, and the Estirad Index.

In terms of foreign ownership, as of 2015, foreigners can purchase, own, or sell bonds, units of mutual funds, and warrants of domestic joint-stock companies. Foreigners residing in Bahrain for a year or more can own up to 49% of a domestic joint-stock company's equities, but an individual foreigner cannot own more than 1% of a company's issued capital. There are also ten companies that are completely open to foreign investment, including the Arab Banking Corporation (ABC) and the Arab Insurance Group (ARIG).

Bahrain Bourse's services

The Bahrain Bourse, also known as the Bahrain Stock Exchange (BSE), is a self-regulated multi-asset marketplace. It was established in 1987 and operates from Sunday to Thursday. The Bahrain Bourse offers a comprehensive suite of exchange-related facilities to investors, issuers, and intermediaries.

Services

Bahrain Bourse provides listing, trading, settlement, and depositary services for various financial instruments. It offers valuable resources, such as creative insights and problem-solving skills, to help investors, issuers, and intermediaries meet their expectations.

The Bourse has a strong focus on sustainability and, as of June 2020, launched a voluntary environmental, social, and governance (ESG) reporting guideline for listed companies and stakeholders. This was updated in December 2022, and the Bourse also offers ESG-related training on an ad-hoc basis.

As a member of the Federation of Euro-Asian Stock Exchanges, the Bahrain Bourse allows foreigners to purchase, own, or sell bonds, units of mutual funds, and warrants of domestic joint-stock companies. Foreigners residing in Bahrain for a year or more can own up to 49% of a domestic joint-stock company's equities, with a limit of 1% ownership for an individual. There are also ten companies that are completely open to foreign investment, including the Arab Banking Corporation and the Arab Insurance Group.

The Bahrain Bourse also has specific regulations and procedures in place for trading and settlements. For example, securities listed on the BSE must be traded on the floor through registered brokers, and settlements and transfers of ownership of domestic joint-stock securities are undertaken through the BSE.

Bahrain Bourse's sustainability initiatives

The Bahrain Bourse (BHB), also known as the Bahrain Stock Exchange (BSE), is a stock exchange based in Bahrain. It was established in 1987 and currently operates as a self-regulated multi-asset marketplace. The BHB has a strong focus on sustainability and has implemented several initiatives to promote sustainable practices among its listed companies and stakeholders.

One of the key sustainability initiatives of the Bahrain Bourse is its voluntary environmental, social, and governance (ESG) reporting guideline. Launched in June 2020, this guideline encourages listed companies and other stakeholders to report on their ESG performance. The Bahrain Bourse also offers ad-hoc ESG-related training and workshops, such as the Workshop on Sustainability and IR Digital Solutions, to support its listed companies and stakeholders in their sustainability journeys.

In 2022, the Bahrain Bourse provided training on Climate-related Financial Disclosures (TCFD recommendations) in collaboration with the SSE, CDP, and IFC. This training equipped participants with the knowledge and skills to understand and address the financial risks and opportunities associated with climate change. The bourse also has a sustainability bond listing segment, demonstrating its commitment to promoting sustainable investment opportunities.

Additionally, the Bahrain Bourse has a mandatory minimum rule for women on boards, recognising the importance of gender diversity in corporate governance. This rule promotes not just diversity but also contributes to the long-term sustainability of the companies listed on the exchange. The bourse also has an annual sustainability report, further emphasising its commitment to sustainability and transparency.

Overall, the Bahrain Bourse's sustainability initiatives are comprehensive and forward-thinking. By encouraging ESG reporting, providing ESG-related training, promoting gender diversity, and offering sustainable investment opportunities, the bourse is actively contributing to the economic, social, and environmental sustainability of Bahrain and the wider region. These initiatives position the Bahrain Bourse as a leader in driving sustainable practices in the financial industry.

Bahrain Bourse's regulations

Bahrain Bourse Regulations

The Bahrain Bourse, also known as the Bahrain Stock Exchange (BSE), is a self-regulated multi-asset marketplace. It was established in 1987 by Amiri decree and officially began operations in June 1989 with 29 listed companies. The BSE was replaced by the Bahrain Bourse (BHB) in 2010, which was set up as a shareholding company under Law No. 60. The BHB is supervised by an autonomous Board of Directors, with the Governor of the Central Bank of Bahrain as its chair.

The Bahrain Bourse has a comprehensive set of regulations that govern its operations. These include internal regulations, listing and market regulations, trading rules and procedures, and clearing, settlement, and central depository rules.

For instance, Resolution No. (4) of 1992 outlines the prospectus requirements for joint-stock companies' securities. Resolution No. (2) of 1990 addresses certain private regulations regarding securities trading. The BHB also has guidelines for trading treasury bills and debt securities.

In terms of foreign ownership, regulations allow non-residents to purchase, own, or sell bonds, units of mutual funds, and warrants of domestic joint-stock companies. Foreigners residing in Bahrain for a year or more can own up to 49% of a domestic joint-stock company's equities, with a cap of 1% ownership for an individual foreigner. There are also ten companies that are fully open to foreign investment, including the Arab Banking Corporation and the Arab Insurance Group.

The Bahrain Bourse also places importance on sustainability and has launched voluntary environmental, social, and governance (ESG) reporting guidelines for listed companies. It offers ad-hoc ESG-related training and has a mandatory minimum rule for women on boards.

The BSE, and now the BHB, has been a member of several regional and international organisations, including the Federation of Euro-Asian Stock Exchanges, the World Federation of Exchanges, and the Union of Arab Stock Exchanges. This has strengthened its position in the global capital markets.

Bahrain Bourse's growth pillars

The Bahrain Bourse, also known as the Bahrain Stock Exchange (BSE), is a self-regulated multi-asset marketplace. It was established in 1987 as the BSE and has since achieved significant milestones, largely due to the support of the Government of the Kingdom of Bahrain and collaboration with its stakeholders. In 2010, Bahrain Bourse was established as a shareholding company to replace the BSE. Since then, it has joined several regional and international organisations, bolstering its position in the global capital markets.

Bahrain Bourse has four key growth pillars that underpin its business operations and interactions with stakeholders: Origination, Innovation, Collaboration, and Pioneering Spirit. These pillars guide the exchange in providing investors, issuers, and intermediaries with valuable resources and solutions.

The exchange offers a comprehensive suite of exchange-related facilities, including listing, trading, settlement, and depositary services for various financial instruments. It continuously monitors and reviews its existing laws and procedures to further develop and enhance its contribution to Bahrain's economy.

Bahrain Bourse also launched a voluntary environmental, social, and governance (ESG) reporting guideline for listed companies and stakeholders in 2020, with updates made in 2022. The exchange provides ad-hoc ESG-related training and workshops in collaboration with other organisations. Additionally, Bahrain Bourse has ten companies that are completely open to foreign investors, allowing them to purchase, own, or trade a certain percentage of a domestic joint-stock company's equities. These companies include the Arab Banking Corporation (ABC), Arab Insurance Group (ARIG), and Ahli United Bank (AUB), among others.

Frequently asked questions