Bahrain Bourse, which had a market capitalisation of 7.4 billion dinars ($19.7 billion) as of December 10, expects two initial public offerings next year and more listings of real estate investment trust (Reits), its chief executive said.
“The bourse has continued to be resilient despite macroeconomic challenges," Shaikh Khalifa Al Khalifa said. "The reason was positive financial results from listed companies.”
There is also expected growth in fixed income issuances and Reits – one Reit listing is expected in Bahrain in the first half of next year, he said.
The dearth of IPO activity on the Bahrain bourse was due to lack of "global outreach," he said.
“We haven’t done enough and will do more of this in 2018,” Mr Al Khalifa said.
Eskan Bank Realty Income Trust (ERIT), the bourse's only Reit, listed in the fourth quarter of 2016, raising US$36.6 million.
IPO activity has been stagnant in the Middle East and North Africa (Mena) with only a few listings taking place due to weak investment sentiment. The region, however, saw five IPOs in the third quarter of 2017 – a 400 per cent increase when compared to the single IPO recorded in the same quarter last year, according to a report from consultancy EY released on Sunday.
The exchange is also in talks with other Arabian Gulf stock exchanges on plans for a pilot blockchain project that would enable cross-border trading.
“We are discussing this with some of the other exchanges but plans are still in the very early stages,” said Mr Al Khalifa.
Bahrain, the smallest GCC state, has ambitions to become the ‘fintech’ hub of the Middle East and is looking to pioneering technologies to future-proof its capital markets and financial services sectors.
Mr Al Khalifa said the bourse hoped to use distributed ledger platform blockchain to enable investors to trade stocks listed on any of GCC exchanges. The move is in part a counter to the rising practice of companies cross-listing on various exchanges, which erodes individual bourses’ competitiveness, according to the chief executive.