FEAS Yearbook FEAS Yearbook 2009 | Page 32

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2009 BAHRAIN STOCK EXCHANGE During 2008, BSE implemented its strategic plan in which it upgraded its technical capabilities, allowing the Exchange to launch its online trading service to brokers. Rasheed Mohammed Al-Maraj Chairman The global financial crisis that began with the mortgage crisis in the U.S. has severely affected the performance of bourses and financial markets worldwide, triggering sharp declines in indices compared to the gains recorded in the previous years. The indices of GCC and Arab financial markets along with Bahrain Stock Exchange were apparently affected by the crisis to reflect the interrelation between financial markets worldwide. The performance of Bahrain All Share Index in 2008 was not any different than the other indices of bourses, Arab and financial markets. The index posted negative growth of 34.52% during 2008 compared to 2007 although the trading activity was unprecedented in terms of the value and volume of shares traded, and the number of transactions executed throughout the year. During 2008, BSE implemented its strategic plan that was approved in 2007 in which it upgraded its technical capabilities, allowing the Exchange to launch its online trading service to brokers. Moreover, BSE developed the Exchange’s Settlement and Central Depositary services with the aim of facilitating investors’ transactions and allowing them to perform most of their transactions through the Exchange’s website. In implementing BSE’s strategy, HISTORY AND DEVELOPMENT It was back in 1920 that the first branch of a commercial bank, Standard Chartered Bank, formerly known as Eastern Bank, opened its doors in Bahrain, the first to do so in the region in order to facilitate the business community at that time. By 1957, Bahrain had its first public shareholding company - the National Bank of Bahrain. However, it was not until the late 1970s and early 1980s that Bahrain realized there was a growing need for an organized stock market, due to the growth provided by the oil price boom in the region. PAGE 30 BSE in cooperation with the Central Bank of Bahrain listed several mutual funds on the Exchange during the year. Shaikh Salman bin Hamad Al Khalifa, Deputy Supreme Commander and Chairman of the Economic Board (EDB), honored the signing ceremony held in Singapore by his presence, where a consultancy agreement between BSE and Singapore Exchange (SGX) was signed. The MOU mainly aims to foster a closer relationship and develop channels of information exchange in the areas of operations, regulatory framework, and the equities products traded on the respective markets. In addition, BSE has taken a strategic move towards developing the Exchange by signing a consultancy agreement with Singapore Exchange (SGX). According to this consultancy agreement, SGX will provide detailed recommendations to BSE for the purpose of enhancing BSE’s competitiveness both regionally and internationally. In regards to BSE’s relocation to Bahrain Financial Harbor, the project’s manager has been appointed and BSE’s offices are near completion. The Exchange is expected to fully commence its operations and provide its services from its new premises in the second half of 2009. As a result, the Government, in cooperation with the International Finance Corporation (IFC), prepared a feasibility study highlighting the importance of establishing an official stock market in Bahrain. In 1987, Bahrain Stock Exchange was established following the issuance of Amiri Decree No. 4, and officially commenced operations on 17th June 1989. BSE’s financial results for the year 2008, as included in the budget of this report, showed that the Exchange has reported positive results for its third consecutive year. It recorded a surplus of BD 1,284,338 compared with BD 901,334 in 2007, posting a growth of 42.49%. The accumulated surplus also increased to reach BD 3,950,112 compared to BD 2,665,774 in 2007 recording a growth of 48.17%. On behalf of the members of the Board of Directors of BSE and BSE’s staff, I would like to express my thanks and gratitude to His Majesty King Hamad bin Isa bin Salman Al Khalifa, King of the Kingdom of Bahrain and His Highness Shaikh Khalifa bin Salman Al Khalifa, the Prime Minister, and His Highness Shaikh Salman bin Hamad Al Khalifa, the Crown Prince and Deputy Supreme Commander for their guidance and continuous support of BSE. I would also like to extend my thanks to the members of BSE's Board of Directors for their efforts in developing the BSE during the previous years. I would also like to thank BSE’s management and staff for their hard work during the year, hoping that such efforts will continue to further develop the Exchange. FUTURE OUTLOOK In the year 2009, the BSE will continue its efforts to attract more local, regional, and international mutual funds despite the global financial crisis. The BSE will also seek more cooperation with stock exchanges worldwide, with the aim of exchanging information and expertise. The BSE will also continue to attract more listed companies, both local and international.