Investments in mutual funds in Bahrain decreased by nearly 4.75% from USD 9.17 million in the fourth quarter of 2010 to USD 8.74 million at the end of the second quarter of 2011, data compiled by Zawya Funds Monitor show. But the trend appears to be reversing.
The unrest in the country cost the economy around USD 2 billion, apart from damage to its reputation as a modern and progressing Middle East economy.
The Bahrain Stock Exchange (BSE) index closed on September 29, 2011 at 1,165.75, a 18.36% drop from 1,427.85 on January 3, 2011 (BD). The index started the year positively, rising up to the middle of February, when the Pearl Revolution or February 14 Revolutionerupted in the kingdom. After the revolution, the BSE's performance started decreasing gradually.
Famous for its regulation and liberal approach, and with four decades of experience in the funds industry, Bahrain does more than most to encourage foreign investment into its growing financial sector.
The fund management industry in Bahrain can trace its origins to the mid 1980s, with the first locally established funds going back as far as 1984. Bahrain is seeing growing interest from regional specialized financial institutions that are actively involved in the structuring of mutual fund products in particular. The mutual funds industry is one of the fastest growing segments of the overall financial sector.
In June 2011, the CBB's statistics cited 2,819 registered funds, a 1.88% increase since 4Q-2010 (2,767 registered funds). Of the 2,819 funds, 127 are Bahrain domiciled schemes, among which 71 are conventional funds and 56 are Islamic funds.
The number of foreign funds registered in Bahrain for sale totaled 2,702 in August 2011, compared with almost 2,640 in the same period in the previous year.
As a result of the rapid changes currently taking place in the Middle East, some countries present significant opportunities for asset management firms.
Bahrain attracts a good mix of Middle Eastern and Western investors. Investors from developed markets are attracted to Bahrain due to the internationally recognized regulatory framework.
Asset managers focusing on MENA markets have a long-term positive outlook on the regional market and its institutions. They may want to see Bahrain's regulatory structure evolving towards more complicated and diverse investment products such as leveraged or structured products.
Regarded as one of the best-regulated financial centers in the Middle East, Bahrain has been a prominent financial hub for more than 40 years; however, according to the Z/Yen Group's 10th edition of the Global Financial Centers Index (GFCI), Bahrain fell six places to be the 55th most prominent financial centre in the world, after being the 49th in the previous edition of the index.
Bahrain has worked to diversify its economy over the past decade, culminating in being named by Global Investor Magazine as the Best Financial Center in the Middle East, in November 2010.
The Bahraini funds industry has USD 9 billion of assets under management, meaning plenty is on hand for wide opportunities. Despite the recent disruptions of the Arab Spring, the country is still recognized as a regional banking, trading and Islamic finance hub. Its advantages as a diversified economy and relatively liberal society have outweighed the risks, so far.
According to the Central Bank of Bahrain (CBB) financial services currently make up 27.6% of Bahrain's GDP. CBB's statistics listed 409 financial institutions in the country as of July 2011, including 132 banks, of which 30 are retail banks, 76 wholesale banks (USD 196.9 billion in assets) and 26 are Islamic banks (USD 24 billion in assets).
The unrest in the country cost the economy around USD 2 billion, apart from damage to its reputation as a modern and progressing Middle East economy.
The Bahrain Stock Exchange (BSE) index closed on September 29, 2011 at 1,165.75, a 18.36% drop from 1,427.85 on January 3, 2011 (BD). The index started the year positively, rising up to the middle of February, when the Pearl Revolution or February 14 Revolutionerupted in the kingdom. After the revolution, the BSE's performance started decreasing gradually.
Famous for its regulation and liberal approach, and with four decades of experience in the funds industry, Bahrain does more than most to encourage foreign investment into its growing financial sector.
The fund management industry in Bahrain can trace its origins to the mid 1980s, with the first locally established funds going back as far as 1984. Bahrain is seeing growing interest from regional specialized financial institutions that are actively involved in the structuring of mutual fund products in particular. The mutual funds industry is one of the fastest growing segments of the overall financial sector.
In June 2011, the CBB's statistics cited 2,819 registered funds, a 1.88% increase since 4Q-2010 (2,767 registered funds). Of the 2,819 funds, 127 are Bahrain domiciled schemes, among which 71 are conventional funds and 56 are Islamic funds.
The number of foreign funds registered in Bahrain for sale totaled 2,702 in August 2011, compared with almost 2,640 in the same period in the previous year.
According to the Zawya Funds Monitor, 1Q-2011 showed fund outflows in Bahrain of almost USD 0.15 million due to the recent turmoil, but 2Q-2011 witnessed inflows of USD 0.99 million, reflecting the efforts made by the industry to make up the losses.
As a result of the rapid changes currently taking place in the Middle East, some countries present significant opportunities for asset management firms.
Bahrain attracts a good mix of Middle Eastern and Western investors. Investors from developed markets are attracted to Bahrain due to the internationally recognized regulatory framework.
Asset managers focusing on MENA markets have a long-term positive outlook on the regional market and its institutions. They may want to see Bahrain's regulatory structure evolving towards more complicated and diverse investment products such as leveraged or structured products.
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