GCC Equity Markets Performance
Global markets witnessed a substantial 2023 rebound, marking the most significant gain since 2019 amidst late-year volatility. Speculations on interest rates, inflation, and geopolitical factors triggered fluctuations. The MSCI World Index surged by 21.8%, reversing the prior year's decline. In the GCC, equity markets posted a more modest 3.7% gain, rebounding from the sharp declines recorded in October 2023.
Bahrain Bourse's Market Performance
While GCC markets reported smaller gains compared to global peers, Bahrain Bourse secured the 3rd position with a 4% increase, despite challenges such as geopolitical tensions and oil price volatility. The Bahrain All Share Index closed at 1,971.492 points, marking a 4.02% year-on-year growth. Market capitalization decreased by 31.91%, reaching BD 7.77 billion. However, positive trends emerged in trading activity, with a 23.82% increase in the value of shares traded and a 45.4% surge in the volume of shares traded.
Roadshows
In line with our steadfast commitment to attract international investments and strengthen linkages with international fund and asset managers, Bahrain Bourse and Bahrain Clear successfully participated in two roadshows organized by HSBC. During the HSBC MENA Markets and Securities Services Forum 2023 in Dubai, Bahrain Bourse connected with prominent international fund and asset managers, offering a comprehensive showcase of the Kingdom's capital market landscape. The emphasis was placed on highlighting significant regulatory and market infrastructure advancements that were actively in progress, along with the distinctive opportunities presented by its listed companies.
Similarly, Bahrain Bourse and Bahrain Clear also participated in the HSBC GCC London Conference 2023 held in June 2023 along with GCC Exchanges. The roadshow provided another excellent opportunity for Bahrain Bourse to showcase its recent developments and initiatives to international fund managers and asset managers, and hence solidify institutional investor appetite in Bahrain's capital market.
Tabadul Hub
Building upon the milestone of launching the Tabadul Hub during 2022, Bahrain Bourse and Abu Dhabi Securities Exchange (ADX) welcomed the inclusion of the Muscat Stock Exchange (MSX) on the Tabadul platform in January 2023. The platform is a major step towards enhancing capital market competitiveness in the region, as it links markets together and seeks to provide more investment options for investors, given the increased appetite from regional investors.
Bahrain Trade
In line with Bahrain Bourse's efforts to expand its Bahrain Trade network, Bahrain Bourse welcomed Al Salam Bank to Bahrain Trade in April 2023. This initiative empowers the bank's retail clients to seamlessly engage in securities trading on Bahrain Bourse.
Regulatory Developments
In our pursuit of cultivating a robust and sustainable market ecosystem, Bahrain Bourse introduced the enhanced Bahrain Investment Market (BIM) regulations in April 2023. This strategic initiative was poised to propel market growth and development, and streamline the admission process, paving the way for future listings on BIM.
Simultaneously, Bahrain Bourse listed Montreal Motors BSC's on the Bahrain Investment Market, a fully-fledged motor distribution business. Aligned with our recently revised BIM framework, specifically crafted to attract growth companies, this development reinforces our belief that the platform serves as the optimal launch pad for ambitious businesses seeking growth.
In consonance with the Kingdom's Economic Vision 2030 and our dedication to the UN's Sustainable Development Goals, the Central Bank of Bahrain took a monumental step by officially issuing the ESG Reporting Guidelines to be applicable on all listed companies for the reporting period ending December 2024. These guidelines, which form part of the 6 Volume of the CBB Rulebook, are aimed at establishing a standardized framework, ensured consistent and reliable ESG reporting, fostering transparent and comparable disclosures that align with both social and climate goals. Commencing from the end of 2024, these reporting requirements will be applied comprehensively to listed companies licensees of the Central Bank of Bahrain (banks, insurance firms, financing companies, Investment firms – Category 1 & 2), reinforcing our commitment to encourage responsible and forward-looking financial practices.
MEIRA Annual Conference 2023
In November 2023, we had the privilege of collaborating with the Central Bank of Bahrain to host the Middle East Investor Relations Association Annual Conference titled 'From ESG to Sustainable Capital Markets'. This groundbreaking conference, held under the banner of building a sustainable future, brought together over 400 industry leaders, 39 expert speakers, and 20 key exhibitors, all driven by a shared commitment to responsible investing and ESG integration. The event explored how capital markets could be transformed into a catalyst for fostering best-in-class investor relations and driving impactful sustainable development. Echoing the Kingdom's Financial Services Sector Development Strategy, the MEIRA Annual Conference 2023 ignited momentum for regional collaboration, paving the way for further ESG advancements.
COP28
At Bahrain Bourse, we recognize that tackling climate-related challenges extends beyond local borders—it's a collective responsibility for nations worldwide. In November 2023, aligning with our dedication to promoting sustainable and transparent markets, Bahrain Bourse actively participated in the UN Climate Change conference (COP28) in Dubai. Alongside other organizations, BHB showcased its sustainability endeavors and advancements within the Bahraini capital market. Acknowledging the growing significance of ESG, we initiated our sustainability journey in 2020 by supporting listed companies through voluntary reporting guidelines and other impactful initiatives. The momentum gained from these efforts propels Bahrain Bourse forward in fostering responsible investment practices, acknowledging their global importance for a sustainable future.
Awards
In 2023, Bahrain Bourse's unwavering commitment to enhancing operational aspects throughout the capital market yielded significant recognition. Our steadfast dedication to transparency, and efficiency resulted in the acquisition of three prestigious awards, solidifying our position as a leading stock exchange in the MENA region.
For the second consecutive time, we proudly received the title of the 'Most Sustainable Stock Exchange in the GCC Region' from World Finance Magazine. This accolade underscores our resolute commitment to advancing the ESG agenda in Bahrain's capital market, in line with our firm belief that sustainable practices and transparency are integral to paving the way for enduring success.
In October 2023, we were honored to be the recipient of the 'ICT Leadership Award 2023 at the 43rd Gulf and Middle East Information Technology Exhibition and Conference (GITEX Global). This recognition reflects our adoption of an offsite Business Continuity Planning (BCP) environment through a secure, managed desktop-as-a-service (DaaS) solution. This cutting-edge implementation ensures our employees have ultimate access and a seamless workflow, regardless of their location. We believe this landmark recognition shines a light on our relentless pursuit of innovation and our commitment to building a future-proof infrastructure for Bahrain Bourse through cutting-edge ICT solutions.
As a testament to our tireless efforts to empower the community and foster a culture of responsible investment, Bahrain Bourse was awarded the 'Best Stock Exchange for Financial Literacy Initiatives - GCC' for the year 2023 by Global Banking & Finance Review. Throughout the past year, we have held several key events and workshops in partnership with leading governmental and educational bodies such as the TradeQuest Program, the Smart Investor Program, the Capital Market Apprenticeship Program, the Investment Academy amongst others.
Financials
Bahrain Bourse achieved positive exceptional results this year with a net profit of BD 890,713 in 2023 compared to BD 224,081 in 2022, reporting an increase of 297%. The total operating revenues amounted to BD 5.88 million in 2023 compared to BD 4.79 million in 2022, recording an increase of approximately 23%. The total operating expenses stood at BD 4.84 million in comparison to BD 4.49 million in 2022, reporting an increase of 8%.
Acknowledgements
On behalf of myself and Bahrain Bourse team, I would like to express my heartfelt appreciation to His Majesty King Hamad bin Isa Al Khalifa and His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince, Deputy Supreme Commander of the Armed Forces, and Prime Minister, for their ongoing support of the Bourse and its members. I would also like to thank H.E. the Minister of Industry and Commerce recognition of his unwavering commitment and support to the success of Bahrain Bourse and Bahrain Clear.
Additionally, I would like to sincerely thank the Chairman and the members of BHB's Board of Directors for their steadfast support and ongoing supervision and direction in developing the capital markets and their continuous oversight and guidance.
Our triumphs stand as testaments to the unwavering dedication and passion of our team. At Bahrain Bourse, we prioritize our people, forging a bond built on a shared vision and the relentless pursuit of a brighter future for our market and region.
I would also like to extend my deepest gratitude to our stakeholders and market participants including brokers, listed companies, custodians, investors, and brokerage firms for their proactive efforts which have fueled our growth to shape a dynamic and thriving market.
Future Outlook
As we embark on a new year, the momentum generated in 2023 propels us into the future. Our unwavering commitment persists, focused on expanding investors' access, strengthening regional ties and paving the way towards a sustainable financial landscape. Anticipating a year marked by pivotal milestones, we are dedicated to championing sustainability in capital markets, serving as a formidable catalyst for positive change.
Khalifa bin Ebrahim Al-Khalifa
Chief Executive Officer