Diversification of Islamic Financial Instruments
178
Bahrain Bourse - Shariah-Compliant Index
In 2015, Bahrain Bourse introduced a trading index of Shariah compliant companies 174 to
allow investors, brokers and advisors to take better investment decisions by tracking the
performance of the companies’ stocks listed on the index. CBB predicts that the index will
encourage Islamic banks and other companies to participate in the capital market through
mutual funds and trading of securities that are Shariah compliant175.
The bourse also introduced a catalogue of product and service offerings, which includes
investment and financing instruments to attract investors through providing a range of
choices. Available products include stocks, Sukuk, Mutual Funds and REITs. Planned products
include Exchange-Traded Funds (ETFs) and Stock Lending and Borrowing176.
Eskan Bank Realty Income Trust was Bahrain’s first Sharia-compliant REIT to be listed and
traded on Bahrain Bourse in January 2017. The trust comprises two income-generating and
unleveraged properties; a mixed retail and residential property; and the commercial
components of a mixed-use property development. The Sharia-compliant REIT had a total
value of US$53m approximately at inception177.
Bahrain Financial Exchange
CBB regulated Bahrain Financial Exchange (BFX) to trade structured products, Shariah
compliant and cash instruments. BFX developed an Islamic finance trading platform named
Bait Al Bursa, which offers electronic exchange traded Islamic financial instruments as an
innovative solution that meet the demand of today’s Islamic finance market178. The range of
products includes but is not limited to the following:
 e-Tayseer : a fully automated platform for transactions in the supply, purchase and
sale of assets for facilitating Murabahah transactions. The platform allows suppliers to
place their assets onto the platform ready to be purchased by financial institutions.
Financial institutions can then purchase these assets and conduct Murabahah
transactions with counterparties to fulfill their liquidity management requirements in
a secure online environment179.
 BFX product framework: a platform for multi-asset class trading offers market
participants the ability to trade multiple asset classes on one market. The BFX product
has two main categories: Derivatives Instruments and Cash Instruments. The Shariah-
174 The index comprised 17 Shair’ah compliant stocks at its inception.
175 Bahrain website, Bahrain Bourse launches regions first Islamic Finance Index accessed 8 March 2017, see
176 Bahrain Bourse website. Bahrain Bourse Profile, accessed 15 March 2017. see
177 Bahrain Bourse website. Eskan Bank REIT Units Commence Trading on Bahrain Bourse, accessed 1 April 2017. See
178 Bahrain Financial Exchange website, Islamic markets, accessed 1 March 2017. See
179 Bahrain Financial Exchange website, e-Tayseer, accessed 1 March 2017. See