Mumtalakat, the sovereign wealth fund of Bahrain, is one of four seed investors in a $100 million investment fund designed to bring liquidity to Bahrain’s struggling stock exchange.
Securities & Investment Company (SICO), the Bahrain-based manager of the investment vehicle, has also added seed finance for the fund, which is one of several initiatives from the Central Bank of Bahrain and Bahrain Bourse to make the country’s capital markets more attractive to investors.
“Bahrain’s equity market suffers from low free float, and stocks are thinly traded on the exchange,” said Abdulrazak Hassan Al Qassim, chief executive of the National Bank of Bahrain, another of the seed investors. “The launch of this fund is aimed at solving these issues by increasing liquidity, volumes traded and expanding the investor base.”
The all-share index of the Bahrain Bourse has lost about a quarter of its value since its last peak in March 2015. Like the other oil-exporting countries of the Gulf, Bahrain is suffering from the effects of low oil prices. A report by the National Bank of Kuwait predicted growth in Bahrain to fall to 1.1% this year, a 0.5-point decline compared with 2015.
“As part of our commitment to support initiatives which drive local economic growth, we have invested in this fund in an effort to enhance local capital markets,” said Mahmood Hashim Alkooheji, chief executive of Mumtalakat.
Also seeding the fund are BBK (the Bank of Bahrain and Kuwait) and Osool Asset Management, the investment arm of Bahrain’s Social Insurance Organization and Military Pension Fund.
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