The Bahrain Stock Exchange was established by the Amiri Decree no. 4 in 1987 and became fully functional on June 17, 1989 with twenty nine registered companies. However it was replaced by the Bahrain Bourse, a share holding company, in 2010. Along with the Bahrain All Share Index and the recent Islamic index, the exchange also has a Dow Jones Index which has been operational since July 2005. As of 2015, of the fifty total companies listed with Bahrain Bourse, ten of which are completely open to foreign investors. While foreigners who have resided in Bahrain for more than a year can own and trade up to 49% of domestic joint stock company's equities, an individual foreigner may not deal in shares worth more than 1% of a company's issued capital. However, the capital gains from these bonds and securities are not taxable for both nationals and foreigners. Therefore, it could be a fairly lucrative investment if one were to buy shares of the most successful companies of this stock exchange.
The Companies that Promise Good Returns
According to the fact sheet published by the Dow Jones Index, these are the top three companies registered with the Bahrain Bourse that promise good returns to foreign investors. Being the financial capital of the Middle East, it is only appropriate that they are all banking institutions.
Ahli United Bank: This is the largest bank in Bahrain, headquartered at Manama. It deals in services such as Retail Banking, Corporate Banking, Treasury and Investments, and Private Banking. It has a float factor of 1.00 and an adjusted weight of 27.46%. The bank had an interest income of 309.72M and an interest expense of 96.61M in September 2015 as per the Wall Street Journal.
National Bank of Bahrain: The NBB was established in 1957 and was the first indigenous bank in the country. It is now one of the leading providers of commercial and retail banking services in the country. The leading shareholders of the institution include Bahrain Mumtalakat Holding Company which owns 49% of securities, and The Pension Fund Commission which owns 6.24%. It has a float factor of 1.00 and an adjusted weight of 12.02%.
Arab Banking Corp: This renowned international bank is headquartered at Bahrain and has been a joint stock company since 1980. It has branches across 17 countries including the Americas. Its major shareholders are the Central Bank of Libya and Kuwait Investment Authority. It has a float factor 1.00 and an adjusted weight of 9.64%.The total number of trading securities of the company are 501.