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Issue 8 - June 2016
@BahrainBourse
www.bahrainbourse.com$100 MILLION FUND LAUNCHED TO BOOST LIQUIDITY ON BAHRAIN BOURSE
Investors in the Bahrain Bourse
are expected to see greater li-
quidity in future after a new fund
was launched today with the aim
of enhancing the market’s depth.
The Bahrain Liquidity Fund is
supported by a number of mar-
ket participants and has been
vested with $100m of assets in
cash and shares. The fund will
act as a market maker, provid-
ing two way quotes on most of
the listed stocks with a reason-
able spread to allow the inves-
tors to actively trade their stocks.
To ensure high governance stan-
dards, the fund’s activities and
performance will be evaluated
and monitored on timely ba-
sis by a supervisory board rep-
resenting the seed investors.
By improving liquidity, the fund
aims to address one of the pri-
mary concerns that has made in-
vesting in stocks listed on Bahrain
Bourse less attractive, albeit the
prevailing attractive valuations.
Restricted liquidity currently
causes securities to trade at a dis-
count to their underlying value
and regional peers – the introduc-
tion of the Bahrain Liquidity Fund
aims to help reduce that discount
over the medium to long term.
The fund will help attract new
investors and deepen Bahrain’s
capital markets and is anticipat-
ed to help local businesses raise
capital and have greater access to
alternative courses of financing
other than bank lending, mak-
ing it easier for them to find the
right funding to help them grow.
Bahrain Bourse has seen a num-
ber of initiatives in recent months,
aimed at enhancing local cap-
ital markets. These include the
introduction of the Bahrain Is-
lamic Index (the GCC’s first
Shari’a-compliant index), the in-
troduction of Real Estate Invest-
ment Trusts (REITs) rules and
the offering of Bahraini govern-
ment bonds and treasury bills.
Sh. Khalifa bin Ebrahim Al Khal-
ifa, Chief Executive Officer of
Bahrain Bourse, said: “Capital
markets have a very important
role to play in funding the growth
throughout Bahrain. They have
the potential to enable business-
es to grow faster and create more
jobs and greater prosperity, but
they will only be able to do this
if they have enough liquidity.
“The Bahrain Liquidity Fund is
part of a series of reforms that
will help to enhance and deep-
en Bahrain’s capital markets,
helping the market to reach its
potential and bringing bene-
fits to businesses and investors.”
Ms. Najla M. Al Shirawi, Chief
Executive Officer of Securities
& Investment Company (SICO),
also commented: “As the first ap-
proved market maker on the Bah-
rain Bourse, we are delighted to
announce the launch of Bahrain
Liquidity Fund. This has been
collaboration between SICO and
a number of prominent market
participants, with the support of
the Central Bank of Bahrain and
Bahrain Bourse. I would like to
thank everyone for their contri-
bution and unprecedented sup-
port in realising this initiative.
“More liquid capital markets
can provide real benefits to the
economy. They are the heart of
any economy through which
savings are deployed into long-
term investments. A well devel-
oped and vibrant capital mar-
ket will contribute immensely
to higher economic growth
and more diverse economy.”
BAHRAIN BOURSE LISTS BD200 MILLION GOVERNMENT BOND
Bahrain Bourse announced on
Sunday, 15
th
May 2016 the listing
of the Government Development
Bond – Issue No. 11 that has been
issued by the CBB on behalf of the
Government of Bahrain through
registered brokers at Bahrain
Bourse as of Monday, 16
th
May
2016. The bond will be traded
under the symbol GDEV11.BND.
The BD200 million securities is-
sued at a par value of BD1 each
on 5
th
May 2016 for a period of
5 years ending on 5
th
May 2021.
The returns on these securities
will be paid every six months
on 5
th
November and 5
th
May
every year throughout the peri-
od of this issue. The fixed annu-
al rate of return will be 5.875%.
As of today, investors will be able
to sell and buy the bonds by plac-
ing their orders through the bro-
kers who will feed them into the
trading system. The system will
automatically match the orders
in accordance to the price pri-
ority then time priority, with a
minimum of BD 400 per trans-
action in the primary market.
Following the listing of this issue,
the number of conventional bonds
and sukuk issues listed on BHB
reached 12 issues with an approxi-
mate total value of US$ 5.1 billion.