Bahrain Financial Services

A new regulatory framework governing Bahrain’s sharia-compliant insurance, or takaful, sector is expected to play a key role in generating new growth across the segment by attracting more players to the market as well as boosting competition among operators.

With a strong and well established financial services sector, Bahrain’s role in expanding the global reach of sharia-compliant financing looks set to broaden further through three developments firmed up in July. Two new partnerships were announced last month that will expand the number of Islamic Financial Services (IFS) institutions in the kingdom, while an agency already active in the sector is furthering its work to globalise the industry.

The Central Bank of Bahrain has set out new rules on the issuance of securities as the kingdom looks to boost activity in its financial services sector.

Long a leader in the region’s insurance industry, Bahrain is now facing rising competition, although plans to make medical coverage mandatory for foreign residents could give a welcome boost.

The Kingdom’s stock exchange is to see its first new listing for 2013, with a green light for telecommunications firm Zain Bahrain to launch an initial public offering (IPO). Analysts are likely to follow the float with keen interest as it could serve as an indicator of how far confidence has returned to the Kingdom’s capital markets.

The introduction of measures aimed at updating and expanding the rules on takaful (sharia-compliant) insurance in Bahrain is expected to aid the segment’s efforts to make inroads into the market share currently held by conventional insurers.