Global to launch Bahrain Stock Exchange indices

Mr. Omar M. El-Quqa, CFA, Executive Vice President at Global, said, " these new indices leverage the need for tracking the performance of Bahraini stocks in-line with the great interest the investors are showing in this market, considering the amount of foreign, GCC and Middle East banks and financial institution that the kingdom attracts."

On the reasons behind Global's issuing of these indices, he explained "Global has already highlighted the flourishing economy and financial situation that the Bahraini market is currently witnessing. Also the strategic location of the kingdom along with it being the financial center of the GCC which is currently flourishing as the oil prices goes higher, has given it special importance."

Mr. El-Quqa added that Being one of the most open & well regulated markets in the GCC has helped Bahrain attract investors from all over the world. "As the Bahraini economy continues to grow and becomes stronger, an index to act as a benchmark for portfolio managers and investors interested in Bahraini stocks, in evaluating their performance has become necessary," he said.

"Hence, Global composed a special index to track the performance of the Bahraini stocks under the name of "Global Bahraini Stocks Index". Also special sectoral indices have been built to track the performance of each of the Bahraini sectors individually," he elaborated.

Such an index should help in enhancing the market, as it will work side-by-side on developing more interest among the foreign investors and direct them towards the Bahraini stocks, Global EVP affirmed.

Global Indices of Bahrain Stock Exchange comprises of all Bahraini stocks listed on the Bahrain Stock Exchange, currently 39, distributed among eight sectors. Besides the Bahraini Stocks Index, eight sectoral indices have been built to track the performance of each of the market sectors individually, and they are; The Commercial Banks Index, Investment Index, Preferred Shares Index, Closed Companies Index, Insurance Index, Services Index, Hotels & Tourism Index and Industrial Index. Non-Bahraini Sector was excluded due to its very low liquidity and the rare change in its components.

Mr. El-Quqa pointed that, "in the future, newly listed companies on the stock market will be added under the corresponding index on listing date to ensure that the index reflects the actual market conditions."

The index is maintained according to a transparent methodology that is consistent with the International Finance Corporation (IFC) formula which is a 100% market capitalization weighted index.

Inception of Global Indices of Bahrain Stock Exchange goes back to December 31, 1999 (Base=100). The inception of the Preferred Shares Index and Closed Companies Index was on June 6, 2001 and January 4, 2004 respectively as no stocks were traded in those sectors until those dates.

Adjustments according to corporate actions are made as they occur. The market capitalization of Global Bahraini Indices is calculated in Bahraini Dinar, as follows: (Closing price x Outstanding shares). While companies traded in US dollar has been converted to Bahraini Dinar as well.

The Bahraini market grew by 21.04 percent during the first half of the current year. The highest annual increase was in the year 2004 as the index rose 32.11 percent.

Since the beginning of the current year up till June end, all market sectors managed to achieve a positive performance. This performance varied between the different sectors. A huge increase has been witnessed for the Services sector which has achieved an increase of 44.87 percent in the first six months ending in June 2005, followed by the Investment Sector with an increase of 22.95 percent for the same period. The worst performer was the Preferred Shares Index, which added only 0.85 percent.

The investment sector accounts for the highest percentage of market capitalization in the BSE, equivalent to 34.35 percent, followed by the Commercial Banking sector with 29.24 percent of total market capitalization.

Investors will be able to track Global Indices of Bahrain Stock Exchange during official trading days (Sunday - Thursday) on Reuters' screens and Bloomberg .