SGX has signed an MOU with Bahrain Stock Exchange to foster a closer relationship and develop channels of information exchange between the two markets.

The Bahrain Stock Exchange officially started operating in June 1989. Its financial instruments listed include ordinary and preferred shares, bonds/Islamic Sukuk, and mutual funds. The exchange is regulated by The Central Bank of Bahrain.

There are 52 companies listed on the exchange, 42 mutual funds, and 14 bonds/Islamic Sukuk traded on the exchange. Its market cap is about US$30 bln.

The exchange’s trading session is from 9.30 a.m. to 12:30 noon, including a pre-opening period of 15 minutes starting from 9:15 a.m. Clearing and settlement of transactions is made within two working days (T+2).

Analysts surveyed by Reuters have on average a HOLD call on the stock with a price target of S$7.55, compared to its last traded price of S$5.85.

~ Jin San’s take ~
From setting up a representative office in Beijing to holding a roadshow in Europe, SGX has been very keen to attract more foreign listings in Singapore. This MOU with the Bahrain Stock Exchange can be seen as a stepping stone to SGX’s exposure to investors and companies in a region that is less affected by the global financial crisis.

According to Kuwait’s Global Investment House, the Bahrain Stock Exchange still offers the best value in the Gulf Cooperation Council (GCC). Despite the global financial crisis causing a decline in the gulf markets, Global said Bahrain’s economy has been posting healthy double digit growth rates in the past five years.

But in Singapore, where we’re currently in a recession, SGX cannot escape the extremely bearish market. And with its stock priced at S$5.85 (it was trading above S$15 this time last year), it is set to tumble further. Its current P/E of 13 is still a bit expensive for a value investor. Well, till the next bull run, then.

As always, please see your licensed financial advisor before making any investment decisions.