Bahrain Financial Exchange (BFX) has managed to attract five regional companies to the kingdom since it was set up and it is now looking to increase this to 20 by the end of the year.

"This is something we are doing that is positive for the economy of Bahrain because these brokers and representatives bring capital to the country, set up offices and also hire local staff," said BFX managing director and chief executive Arshad Khan.

"The BFX platform offers exposure to very diverse markets. We are offering a range of unique products from derivatives and commodities trading to currencies and we are looking to introduce new products, including an equity derivative package," he noted.

"Dow Jones are launching an equity index for trading in derivatives which will give us exposure to Indian markets. A lot of people in the region are non-resident Indians and this index derivative will give them the exposure to Indian markets they want."

"The region's financial industry is very diverse, but not in derivatives which is a new business that we have created here," he said.

"People from the Middle East who wanted to trade in derivatives in the past had to do so through international businesses and that meant capital leaving the country.

"By trading on the BFX the capital remains here."

The exchange currently trades from 8.30am to 9.30pm which makes it by far the market that is open the longest.

But there are plans to extend this to opening at 6am so clients can trade in Indian markets when they open two-and-a-half hours ahead of Bahrain.

"Our first quarter has been extremely successful as we managed $250.70 million worth of business with a total volume of 6,461 contracts with absolutely no glitches in our trading platform," he said.

"Our settlement system, T+! is the most modern available and it has to be so that we manage to achieve the settlement of all trades on the exchange overnight so they are all completed by the time the market opens the following morning," he said.

Khan said this is a completely electronic system which clears through Standard Chartered Bank which ensures everyone's obligations are met.

"There would be no chance of you getting the kind of problem that rogue trader Nick Leeson caused Baring Brothers in Singapore under this system.

"We are very pleased with our first quarter but the first six months are crucial because business across the financial industry slows come summer holidays and Ramadan.

"We are looking to bring in more institutions, diversify our investment base and introduce new projects to increase volume," he added.-TradeArabia News Service