Bahrain Bourse in strategic partnership deal with ADX

Enhanced market liquidity, dual listings and Exchange Traded Funds (ETFs) issues are set to result from a strategic partnership between Bahrain Bourse (BHB) and Abu Dhabi Securities Exchange (ADX).

This follows the signing of an agreement which will see the two securities markets implement a cross-border plan in trading and post-trading environments, over the next nine months.

New measures in the pipeline would enable the seamless placement of orders on both BHB and ADX, while reducing transaction costs and enhancing liquidity.

Furthermore, the two exchanges have agreed to implement a number of products and services including ETFs and smart order routing as well as cross-border direct trading, to promote the issuance of low-cost investment vehicles in the securities markets.

BHB chairman Abdulkarim Bucheery said: “Our partnership with ADX will attract new investors and promote a healthy listing deal pipeline.”

BHB chief executive Shaikh Khalifa bin Ebrahim Al Khalifa said: “Innovation sits at the heart of our collaboration, in line with our mandate to evolve the Middle East’s capital market ecosystem, and hence we also aim to promote the listing of ETFs, enable CSD integration in both markets, and automate smart order routing systems. This partnership will enable us to set a blueprint for future regional collaboration and harness each other’s capabilities.”

The agreement was among several signed during the official visit of His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and Prime Minister, to the UAE.

Following a scarcity of IPO activity across exchanges in the region, 2021 has seen a surge of major IPOs with Saudi Arabia and Abu Dhabi leading the pack.

According to PwC, there remains a market consensus that there will be further IPOs across the region this year as we move into a post Covid-19 economy.

The advisory firm said this potentially is further assisted by Bahrain’s adoption of the Global Industry Classification Standard in July to improve effectiveness and transparency in its capital markets, the 2020 amendment to UAE company law, the recent launch of the Nasdaq Dubai Growth Market designed to provide access to the capital markets for small and medium enterprises (SMEs) and a number of governments in the region looking to privatise government assets.

The current shift shows growing confidence in the region, as a result of high oil prices and the Covid-19 recovery, together with high global equity valuations as well as the need for government entities to raise financing.




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