Bahrain Bourse to adopt GICS for listed companies

 

This is in line with Bahrain Bourse’s strategy to enhance transparency and efficiency in Bahrain’s capital market and to meet best international practices.

 

The industrial re-classification aims to establish alignment with global industrial standards for classifying listed companies, provide better information to international investors on the performance of sectoral indices, and enable easier company and sectoral comparability with global peers as well as comparability between companies and sectors.

 

On the adoption of the global classification mechanism, CEO Shaikh Khalifa bin Ebrahim Al-Khalifa said: "With globalisation taking place at a fast pace, our market has also shown dynamic interaction with numerous changes in the global markets. It is imperative that we consistently aim to meet the growing needs of the global investment community."

 

"This is a very important step when it comes to assisting investors in taking sector investing decisions and portfolio diversification. Investors need objectively defined investment categories to design and carry out efficient portfolio strategies," he stated.

 

"The Global Industry Classification Standard (GICS) successfully resolves many of the issues with previous classification systems, by reflecting the current state of all industries, identifying very specialized sub industries, and portraying an accurate reflection of the marketplace as much as possible," noted Shaikh Khalifa.

 

The GICS is a global hierarchical industry classification standard developed by index providers MSCI and S&P Dow Jones Indices and it covers 11 sectors representing first level of GICS.

 

Of the 11 sectors, companies currently listed on Bahrain Bourse will be reclassified into seven sectors based on their principal business activity (Level 1): Materials (will include 1 company), Industrials (covering Capital Goods, and Commercial & Professional Services and Transportation) will include 3 companies, Consumer Discretionary (covering Consumer Services, Retailing, Automobiles & Components, and Consumer Durables & Apparel) will include 5 companies, Consumer Staples (covering Food & Staples Retailing, and Food, Beverage & Tobacco, and Household & Personal Products) will include 4 companies, Financials (covering Banks, Insurance, and Diversified Financials) will include 22 companies , Communication Services (covering Telecommunication Services, and Media & Entertainment) will include 3 companies, and Real Estate (covering REITs, and Real Estate Management & Development) will include 3 companies.

 

The remaining four industrial sector groups (Energy, Healthcare, Information Technology, and Utilities) will remain inactive as there are currently no companies listed on Bahrain Bourse that can be classified under those groups.

 

However, these four industrial sector groups will be activated with immediate effect when relevant companies to those industry groups are listed.

 

Furthermore, to increase awareness and provide clarity of the new standard, Bahrain Bourse launched virtual awareness workshops targeted towards various stakeholder groups over the past four months to raise awareness on the planned industrial re-classification revamps of listed companies following the adoption of GICS.-TradeArabia News Service