Modern architecture adorns the harbor

ahrain Financial Harbour is a world-class, fully integrated master planned development aiming to create a complete financial city–a self-contained community in the center of Manama

The Bahrain Stock Exchange (BSE) has been growing in market capitalization, and in the number of companies that trade on it, since it opened 20 years ago. At the same time it has managed to avoid the declines that have shaken other markets around the world in the past few years.

“Over the last five years in terms of performance, our index has improved by more than 160%, which has given a good return to our investors,” said Fouad A. Rahman Rashid, Director of the BSE. “Over the last 5 years, the BSE has been a very steady market with not much volatility taking place. This was proven in 2006, when some of the neighboring markets suffered severe corrections and Bahrain did not.”

Total market capitalization on the BSE has risen to more than $29 billion in recent months, and the number of companies that trade there is now more than 50. The Bahraini bourse switched to an electronic trading platform in 2000, and its management is working hard to keep the exchange at the forefront of the region's capital markets and maintain its excellent reputation.

The BSE announced in December that it will move its headquarters to the Bahrain Financial Harbour, a real estate project that is currently being developed on 380,000 square meters of prime waterfront property in the capital city of Manama.

The Financial Harbor will combine office space with hotels, leisure and entertainment opportunities that is intended to concentrate the businesses in Bahrain's financial industry, which are currently spread around Manama, into a single financial district.

“BSE's relocation to the Bahrain Financial Harbour intends to provide a better working environment supported by a modern infrastructure, hence allowing the exchange to further develop and expand its operations,” Rashid explained.

The stock exchange already attracts a large amount of investment from outside the country, and management is committed to attracting even more. About 60% of market capitalization is owned by foreigners, with limits to foreign ownership set by the companies themselves.

Turnover of shares is low compared to other stock markets because Bahraini companies tend to attract “buy and hold” investors, rather than day traders, Rashid said. He and his colleagues are working to increase listings and improve liquidity to ensure the BSE will remain attractive, though details of the plan won't be made public until the final version is approved.