Bank ABC, a leading player in the region’s banking industry, said it has obtained approval from the Central Bank of Bahrain (CBB) to appoint a market maker for enhancing the liquidity of its share trading on the Bahrain Bourse.
This arrangement was also approved by the shareholders during Bank ABC’s Ordinary General Assembly meeting held in March, said a statement from the bank.
To achieve this goal, the Bahrain-based bank has appointed as of June 20 the Securities and Investment Company (Sico) as the designated market maker with respect to the bank’s ordinary shares listed on the Bahrain Bourse.
As per the market making arrangement, Sico has sole discretion to buy and sell a percentage of Bank ABC shares not exceeding 1 per cent of the total issued share capital, on ABC’s behalf, thereby creating a more dynamic two-way market that will enhance the liquidity of the bank’s shares for market participants.
The market making programme with Sico will be in effect for an initial 12-month period following its establishment, so as to enable Bank ABC to gauge the success of the arrangement, but it may be extended thereafter if the Board of Directors considers it appropriate.
Group CEO Dr Khaled Kawan said it has had a longstanding issue in that the intrinsic value of the bank is not fully reflected in its Bahrain Bourse share price.
“A number of factors have contributed to this, including the low trading volume of Bank ABC’s ordinary shares on the Bahrain Bourse. The market making mechanism is designed to contribute to tackling this issue,” noted Dr Kawan.
Bank ABC is a leading player in the region’s banking industry and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, syndications, treasury products and Islamic banking.
It also provides retail banking services through its network of retail banks in Jordan, Egypt, Tunisia and Algeria, he added.