CBB allays financial sector meltdown fears
Manama, September 22, 2008
Fears of a potential meltdown spreading to Bahrain's financial sector were allayed on Sunday by the Central Bank of Bahrain (CBB).
'Our local banks are insulated enough to withstand potential fallouts of the crisis which is sending tremors in the global financial markets,' a CBB spokesperson said.
The statement was based on the results of comprehensive survey conducted by the CBB to assess the potential impact of the global crisis, said a report in our sister publication, the Gulf Daily News.
The study was prompted by the collapse of the US giant Lehman Brothers, which sent shockwaves across financial markets and saw stock markets plummet.
'Bahrain based banks have managed to withstand the negative global trends and are enjoying sufficient liquidity to meet commitments and ensure the usual workflow', the CBB said.
It also said that the US Insurance Giant AIG Group operated its activities in Bahrain through three companies: The American Life Insurance Company, the New Hampshire Reinsurance Company and the AIG Takaful.
AIG has also confirmed that it was business as usual in Bahrain, allaying any fears of potential problems.
It also pledged to continue honouring all insurance policy obligations in Bahrain.
The index Bahrain Stock Exchange has dropped by 6.68 per cent up to September 18, compared with average 14 pc in the regional markets.
'The BSE managed to withstand the global pressures despite of its open door policies and the heavy presence of non-Bahraini investors', the CBB said.
The BSE has been witnessing an unprecedented performance reporting an overall BD597.6 million ($1.5 billion) in traded shares between January and last month. This represents a rise of 198.85 per cent over last year.
Finalised transactions also soared by 242 per cent to top 3,2479 while overall shares jumped to 1.165 billion, an increase of 99.3 per cent.
The market value of companies listed on BSE also grew by 23.18 per cent to top an overall BD11.206 billion, up from BD9.097 billion in August last year. - TradeArabia News Service