The Bahrain Monetary Agency (BMA), the Kingdom of Bahrain’s central bank and single regulator for the financial services industry, is seeing phenomenal growth in the Kingdom’s mutual fund industry.
The total assets under management by BMA-authorised mutual funds have grown 55% to US%8.3 billion in the last year alone, while growth in the past four years has exceeded 180%.
Locally-domiciled funds, particularly Islamic funds, have driven some of the growth in fund registrations in Bahrain, said Mr. Mohammed Ayman Al Tajer, Director, Non-Bank Financial Institutions Supervision, at the BMA, speaking on the sidelines of the Annual Fund Forum International, being held in Monaco, from 4 to 7 July 2006.
A high-level BMA delegation taking part in the event is led by Mr. Abdul Rahman Al Baker, Executive Director, Financial Institutions Supervision, and also includes Mr. Ahmed Abdul Aziz Al Bassam, Director, Licensing & Policy.
“Bahrain is fast becoming a prominent destination in the region for collective investment schemes (CIS), particularly locally-incorporated investment funds,” said Mr. Al Tajer.
The number of CIS authorized by the BMA totaled 2,094 at March-end 2006, compared with 1,657 and 1,256 funds at the same time in 2005 and 2002, respectively. The assets managed by the authorized funds stood at US$8.3 billion at March-end 2006, up from US5.4 billion and US$2.9 billion in 2005 and 2002 respectively.
Locally-incorporated mutual funds totaled 92 at March-end 2006, compared with 63 at the same time in 2005 and 28 in 2002. The assets under management of the authorized locally-incorporated funds was US$2.8 billion at March-end 2006, compared with US$1.4 billion and US$180 million at the same time in 2005 and 2002 respectively.
Of the locally-incorporated CIS at March-end 2006, 36 were Islamic funds, with a value of over US$915 million.
“The average size of Bahrain-domiciled funds, authorized during 2006, was US$60 million and the sponsors/managers of these funds are prominent institutions from outside Bahrain, including UK and other GCC states,” said Mr. Al Tajer.
Among the funds authoirsed by the BMA so far this year include those sponsored by Kuwait-based Gulf Investment Corporation, Mashreqbank (UAE), DTZ Finance (UK), Unicorn Investment Bank (Bahrain), Global Investment House (Kuwait) and Al Tawfeek Company for Investment Funds (Cayman Islands), among others.
“Strong investment opportunities in the GCC and MENA region are increasingly attracting investors looking for portfolio diversification,” said Mr. Al Tajer. As a result, mutual funds with a regional investment focus have increased dramatically in recent years, with Bahrain proving a major destination for registration of such funds.
The Regulations Governing Collective Investment Schemes, issued by the BMA in 1992, are the cornerstone of mutual fund regulation in Bahrain, said Mr. Al Baker.
The CIS rules regulate the structure and operation of mutual funds and provide a modern, forward looking platform for registering and managing mutual funds in and from Bahrain.
