During 2022, Bahrain Bourse focused on intensifying regional and global outreach particularly in line with bolstering the goals and objectives set towards the Financial Services Sector Development Strategy 2022-2026 in terms of strengthening GCC linkages. This year witnessed a key milestone within the regional capital markets, marked by the launch of “Tabadul", the region's first digital exchange hub.
“Tabadul" was the result of the signed strategic partnership agreement in November 2021 between Abu Dhabi Securities Exchange (ADX) and Bahrain Bourse (BHB) to implement a cross-border plan in trading and post-trading environments. Based on the mutual market access model, “Tabadul" allows investments across Bahrain Bourse and Abu Dhabi and enable investors to trade directly on both exchanges through licensed brokers in both markets.
Following the launch of “Tabadul" by Bahrain Bourse and ADX in July 2022, Muscat Stock Exchange joined the “Tabadul" platform in October 2022, according to a cooperation agreement signed by Bahrain Bourse and Muscat Stock Exchange. The signing of the agreement supports GCC countries' collaborative efforts to enhance the relations between institutions and systems to strengthen collaborative efforts across GCC capital markets.
On the regulatory front, Bahrain Bourse implemented the Issuers Violations Framework that covers a total of 19 violations, with the aim of enhancing transparency and fairness in the market by preventing violations and its associated risk in the market. The Issuers Violations Framework stipulates the rules for imposing monetary fines and/or sanctions, and the violations framework that apply for non-compliance to the Listing Rules, and any other applicable BHB business rules, regulations and directives as deemed appropriate. The implementation of the Issuers Violations Framework comes in line with Bahrain Bourse's commitment to position Bahrain's capital market at the forefront of adopting global financial market standards.
With regards to Bahrain Clear, Bahrain Bourse's fully-owned subsidiary, the company continued its efforts to enhance the services it provides to investors and issuers. This year, Bahrain Clear expanded its services to encompass both public and private shareholding companies with the launch of Bahrain Private Market, a new comprehensive platform for closed shareholding companies. The platform aims to provide a full suite of bespoke share registrar services in a secure and electronic format in accordance with issued Law No. (09) of 2022 in relation to commercial registration services published in the Official Gazette No. (3594).
With the launch of Bahrain Private Market, Bahrain Clear will utilize its expertise to further support the growth of private market infrastructures and foster innovation. The platform enables closed shareholding companies to access, connect, manage and execute their transactions in an efficient and effective manner. Serving as a unique platform for closed shareholding companies, Bahrain Private Market provides greater flexibility and the opportunity to trade shares between existing shareholders.
In addition, Bahrain Clear launched a comprehensive value-added services for both public shareholding companies and closed companies to offer eAGM and eVoting services including Board Elections. The web-based service aims to drive higher shareholder engagement through enabling both virtual and hybrid AGMs, real-time access to voting results with weighted voting and meeting quorum, providing secure verification of shareholders and their representatives, and enabling flexibility in accessibility whilst offering full audit trails. The service aims to further highlight the importance of shareholders' role in fully exercising their voting rights during AGMs through easier connectivity in virtual or hybrid formats, which will further drive and enhance shareholder engagement.
This major milestone aims to embrace best corporate governance and investor relations practices whilst maintaining higher shareholder engagement as well builds upon the success achieved in previous years in terms of offering electronic AGM services.
During the year, more than BD 224.92 million were distributed as cash dividends for the year ended 31st December 2022 (for companies listed on Bahrain Bourse as well as cross-listed companies), and more than BD 4.11 million as unclaimed accumulated cash dividends. Bahrain Clear will continue its efforts to develop its processes and systems to update shareholders' information by contacting them and implementing KYC procedures in order to reach out to the maximum number of shareholders with accumulated dividends.
Financials
Our results are a testament to the progress of BHB over the years that has been focused towards cultivating capital raising and investment opportunities and enhancing operational efficiency. We believe that Bahrain Bourse's solid infrastructure, and optimistic strategy will drive more opportunities to the Bahraini capital market to achieve higher profitability in the upcoming years.
Looking into Bahrain Bourse's financial performance in 2022, BHB achieved a net profit of BD 224,081 compared to a loss of BD (455,010) to record an increase of 149% in comparison to year 2021. The total operating revenues amounted to BD 4.79 million in 2022 compared to BD 3.56 million in 2021, recording an increase of approximately 35%. The total operating expenses were BD 4.57 million in comparison to BD 4.01 million in 2021, reporting an increase of approximately 14%.
Bahrain Bourse's total assets increased to BD 49.93 million in 2022 against BD 44.47 million in 2021, while the total liabilities reached BD 46.12 million compared to BD 40.88 million in 2021. Shareholders' equity increased from BD 3.59 million in 2021 to BD 3.81 million in 2022. Bahrain Bourse achieved positive results despite scaling down of the government's financial support since 2019.
Acknowledgements
On behalf of myself and Bahrain Bourse's Board of Directors and Management team, I would like to express my thanks and sincere appreciation to His Majesty King Hamad bin Isa bin Salman Al Khalifa, King of the Kingdom of Bahrain and His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince, Deputy Supreme Commander of the Armed Forces, and Prime Minister for their guidance and continuous support to Bahrain Bourse, and their ongoing efforts to support the prosperity of the country.
I would like to extend my gratitude to H.E. the Minister of Industry and Commerce (the current and previous 'Shareholder') for their continuous support extended to Bahrain Bourse and Bahrain Clear during his tenure. I would also like to thank the Chairman and Board Members of the Central Bank of Bahrain (CBB), and the Governor of the CBB H.E. Rasheed Mohammed Al-Maraj and all CBB employees for their ongoing support to Bahrain Bourse. I would also like to thank the Board of Directors for the efforts they have put to develop the Bourse during the year.
I would like to extend my thanks and gratitude to our issuers, investors, and members and custodians, and stakeholders for their continued support and confidence as we look forward to another year of key milestones to achieve in the coming year. Most importantly, I thank the employees of Bahrain Bourse and Bahrain Bourse for their outstanding efforts during the year.
Abdulkarim Ahmed Bucheery
Chairman