The sector representing Bahrain's investment business firms has been showing strong growth as demonstrated by the figures reported for the third quarter of this year, a report said.

Since the introduction of the investment business (IB) licence by the Central Bank of Bahrain (CBB) in 2006 to replace the restrictive investment advisory licence, the number of investment firm licensees has risen to 50, with new licensees recognising the potential in this market and setting up business in Bahrain, according to the report published in our sister newspaper, the Gulf Daily News.

Figures indicate that the number of IB licences granted by the CBB grew from an initial figure of 22 licensees, who were automatically migrated from the old investment advisory regime in 2006, to 50 licences.

The three categories within the IB licence permit firms to undertake any or the full range of activities, depending on their category and line of business, such as investing as principal, asset management, operating a collective investment undertaking, acting as custodian of financial instruments, or offering brokerage and advisory services on financial instruments to clients.

The sector, comprising firms from all three sub-categories of the IB licence, reported total assets under management (AUM) of $16.46 billion as at September 30, 2012.

The figure indicates a significant increase of 72.4 per cent over the same time last year in which total AUM was reported at $9.55 billion.

"Asset management is certainly an area of specialisation as market participants expand on their services offering," said CBB director of financial institutions supervision Mohammed Al Tajer.

"This would likely increase the size of AUMs which would in turn attract more professionals to this market, who are capable of engineering and developing financial products aimed at investing regionally as well as internationally."

"The industry currently boasts of professionals with a track record and experience in the financial market," he added.

"Opportunities will continue to exist despite any climate pressures, and seizing these opportunities at the right time and at an attractive valuation will, without doubt, lead to the desired exit."

CBB executive director of financial institutions supervision Abdul Rahman A Baker said the CBB was closely monitoring the growth in this important sector and is pleased to see how new market entrants have brought value-added activities to the existing industry by introducing innovative products and structures revolutionised to suit the region's investment appetite. – TradeArabia News Service