Investors in the Bahrain Bourse are expected to see greater liquidity in future after a new fund was launched Wednesday with the aim of enhancing the market’s depth.
The Bahrain Liquidity Fund is supported by a number of market participants and has been vested with $100 million of assets in cash and shares.
The fund will act as a market maker, providing two way quotes on most of the listed stocks with a reasonable spread to allow the investors to actively trade their stocks.
To ensure high governance standards, the fund’s activities and performance will be evaluated and monitored on timely basis by a supervisory board representing the seed investors.
By improving liquidity, the fund aims to address one of the primary concerns that has made investing in stocks listed on Bahrain Bourse less attractive, albeit the prevailing attractive valuations.
Restricted liquidity currently causes securities to trade at a discount to their underlying value and regional peers; the introduction of the Bahrain Liquidity Fund aims to help reduce that discount over the medium to long term.
Source : Arab News