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Wednesday, April 24, 2024 15:2 GMT
The Bahrain All Share index, the bellwether of the Bahrain Bourse (BHB), was the second-best performing market in the GCC in 2019, after remaining range bound in 2018. According to Kamco Research, a division of Kuwait-based non-banking financial firm Kamco, the index was up 20.4% for the year and closed at 1610.18 points at the end of December 2019. Commercial banks were the main drivers of the outperformance, as the sectoral index was up 42.5% for the year. The services index and investment index followed with gains of 18.4% and 5% respectively. On the decline side, industrials lost ground by 29.8% in 2019. Hotels and tourism and insurance indices followed with declines of 12.8% and 10% respectively. For December 2019, the Bahrain All Share index was up 5.5% month-on-month (MoM).Commercial banks again were the best performers in the month, as the sectoral index was up 10% MoM, driven by AUB, as its share price gained by 1.8% MoM. Hotels and tourism and insurance indices followed with gains of 3% and 2.4% respectively. Looking at BHB as a whole, trading activity was down on all parameters in 2019, as average value traded was down from BD1.4 million (~US$3.6 million) in 2018 to BD1.2 million (~US$3.1 million) in 2019.Total value traded in 2019 fell as compared with the previous year, reaching BD286.41 million (~US$755 million) in 2019 from BD323.83 million (~US$853.6 million) in 2018, decreasing by 11.6% year-on-year. Total volumes traded decreased in comparison with last year by 19.7%, reaching 1,157.31m shares in 2019 compared with 1,441.08m shares in 2018. However, the average number of daily transactions surged by 7.73%.Most of the trading activity was dominated by commercial banks with a value of BD191.37 million (~US$504.4 million) capturing 66.8% of the total value of shares during 2019. The commercial banks sector also comprised 59.87% of the total volume of shares traded in the market. In terms of an investor split, Bahraini investors accounted for 60.28% of the total value of shares traded in 2019, while non-Bahraini investors accounted for 39.72% of the total value traded as per BHB. The market breadth was in favor of decliners, with 20 stocks seeing a decline while 14 stocks advanced during the period.Kamco sees the voluntary acquisition of Bahrain Islamic Bank (BisB) by National Bank of Bahrain (NBB) as one of the key events this year. The open offer to BisB shareholders is expected to close today. It was announced last month that acceptances by BisB shareholders of the NBB offer had reached 47.64% of the bank’s issued share capital exceeding the 40.94% minimum acquisition condition, thereby rendering the offer unconditional.The transaction will take place at either cash of BD0.117 million (~466,000) per BisB share or a share exchange at a ratio of 0.167 NBB shares per BisB share. In ratings related action, S&P Global ratings has awarded GFH Financial Group, a ‘B’ long-term issuer credit rating on the strength of its earnings and ability to generate cash flows. The ratings agency assigned GFH a stable outlook after a review of the company’s four distinct business segments.The rating agency also highlighted GFH Group’s ability to generate cash flows and its improving earnings, and expects the new treasury function and progress in its subsidiary Khaleeji Commercial Bank to likely contribute to an increase in income and its headline margins. Separately, Alba announced a new production record by exceeding the 1.36 million tons in 2019 – production stood at 1,365,005 tons, versus 1,011,101 tons in 2018, up by 35% year-on-year (YoY).Performance of the other GCC equity markets was also positive during the year, barring Oman where a decline of 7.9% was recorded. The MSCI GCC Index witnessed a gain of 5.9%, its fourth consecutive year of gains.