Unrest leads to slump in Bahrain bourse
The Bahrain bourse had a turbulent first half of 2011, brought on by the political unrest that hit the Middle East, and extended to the country’s capital Manama.
As a result, by the end of first half, Global Bahraini General Index dropped by 7.59 percent, as it ended at 107.21 points, according to a report prepared by Global Investment House.
Meanwhile, Bahrain All Share Index retreated by 7.86 percent, ending the first half at 1,319.71 points.
The political unrest had its effects on the trading activity of the exchange. In the first half, 273.8 million shares were traded on the Bahrain bourse, down from 403.06 million shares traded in the first half of 2010, a decline of 32 percent, according to the research note.
Aggregate value of shares traded stood at 52.3 million Bahraini dinars ($138.8 million), down from 70.2 million dinars ($186.1 million) in the first half of 2010, a fall of 25.4 percent. Bahrain bourse witnessed the highest traded volume in the first half on June 23, with 50.2 million shares exchanged.
This surge in trading volume was attributed to deals executed on shares of Gulf Finance House (GFH) as part of its capital reorganisation.
Sector wise, commercial banks sector was the most active in terms of volume and value of shares traded in the first half, with 150.7 million shares exchanged at an aggregate value of 22.2 million dinars ($58.8 million), which represented 55 percent and 42.4 percent, respectively, of the market’s aggregates.
Meanwhile, GFH was the top volume leader, with 62.5 million shares traded, at an aggregate value of 8.3 million dinars ($22 million), representing 22.8 percent of total volume of share traded on the Bahraini bourse. GFH’s shares have been suspended from trading during the period from October 17, 2010 to May 08, 2011, until it got necessary approvals to reorganize its capital.
The Islamic bank reduced its paid-up capital through a 4:1 consolidation of shares and followed that by issuing equity-linked convertible murabaha that would be directed towards fund acquisitions and to be used as an initial seed capital for investments.
Heavyweight investment stocks had a poor performance, with the sector’s index retreating by 14.29 percent by the end of the first half.
On the companies’ level, Inovest posted the steepest decline amongst Bahraini listed shares, down by 39.62 percent, as it ended at $0.32.
Meanwhile, share price of Arab Banking Corporation and Al Baraka Banking Group, the largest two investment companies in terms of market capitalisation, declined by the end of the first half by 9.8 percent and 14.93 percent, respectively.
Market Capitalisation of Bahraini listed companies stood at 7.4 billion dinars ($19.7 billion) by the end of the first half, declining from 7.9 billion dinars in 2010, recording a drop of 5.8 percent in the period.