Capital Markets at Different Scales
Functioning capital markets are essential to both visions. Stock exchanges channel savings into productive investment, provide price discovery for assets, enable government-related entities to raise capital through IPOs, and signal economic openness to international investors. Both Abu Dhabi and Bahrain operate domestic stock exchanges. Both have ambitions to deepen capital markets activity. The scale at which they operate differs by an order of magnitude.
Exchange Comparison
| Metric | ADX (Abu Dhabi) | Bahrain Bourse |
|---|---|---|
| Established | 2000 | 1987 (as BSE), restructured 2010 |
| Market Capitalisation | $700 billion+ | ~$25 billion |
| Cap Ratio | ~28:1 | 1x (baseline) |
| Listed Companies | ~80+ | ~40+ |
| Key Listings | ADNOC subsidiaries, FAB, Aldar, IHC, ADQ entities | Alba, NBB, Bahrain Telecom, GFH |
| Daily Trading Volume | Varies; significantly higher | Lower, limited liquidity |
| Recent IPO Activity | ADNOC Distribution, ADNOC Drilling, ADNOC Gas, Borouge, Fertiglobe | Limited recent IPOs |
| Foreign Investor Access | Qualified foreign investor framework | Open to foreign investors |
| Index | ADX General Index | Bahrain All Share Index |
ADX: ADNOC-Driven Growth
The Abu Dhabi Securities Exchange has been transformed by ADNOC’s IPO programme. The listing of ADNOC Distribution in 2017, followed by ADNOC Drilling, ADNOC Gas, Borouge, and Fertiglobe, has added hundreds of billions of dollars in market capitalisation to ADX. These listings turned ADX from a mid-sized Gulf exchange into one of the region’s most significant capital markets.
Beyond ADNOC, ADX hosts First Abu Dhabi Bank, Aldar Properties, International Holding Company (IHC), and multiple ADQ-linked entities. The exchange benefits from the depth and diversity of Abu Dhabi’s corporate landscape — government-related entities provide large, liquid listings that attract institutional investors.
ADX’s market capitalisation exceeding $700 billion places it among the largest exchanges in the Middle East. Daily trading volumes, while variable, have increased substantially with the addition of ADNOC subsidiaries and improved market infrastructure including a T+2 settlement cycle and enhanced foreign investor access.
Bahrain Bourse: Domestic Market
The Bahrain Bourse operates at a fundamentally smaller scale. Market capitalisation of approximately $25 billion reflects the size of the Bahraini corporate sector. Key listings — Alba, the National Bank of Bahrain, Bahrain Telecom, GFH Financial Group — provide domestic investor access to the kingdom’s leading companies.
Trading volumes are limited, reflecting a smaller investor base and fewer institutional market makers. Liquidity constraints mean that large transactions can move prices significantly — a challenge for institutional investors seeking to build or exit positions without market impact.
Recent IPO activity on the Bahrain Bourse has been limited compared to ADX’s ADNOC-driven pipeline. The kingdom’s corporate sector produces fewer IPO candidates of significant size, and companies seeking to list may evaluate regional alternatives including ADX, the Dubai Financial Market, or the Saudi Tadawul.
The IPO Pipeline Effect
ADX’s transformation demonstrates how a single strategic decision — ADNOC’s IPO programme — can reshape a capital market. Each ADNOC subsidiary listing brought international investor attention, increased trading volume, and improved the exchange’s infrastructure. The listings created a virtuous cycle: more liquidity attracted more investors, which made subsequent listings more successful.
Bahrain lacks an equivalent IPO pipeline. Mumtalakat’s portfolio companies — Alba, Gulf Air, BAPCO — could theoretically be listed, but each presents challenges. Gulf Air has been loss-making for extended periods. BAPCO is mid-modernisation. Alba is already listed. Without a pipeline of large, profitable companies capable of public offering, the Bahrain Bourse’s growth prospects are constrained.
Capital Markets and Vision 2030
For Abu Dhabi, ADX is an active tool of vision execution. The ADNOC IPOs raised capital, improved corporate governance, and signalled market openness. Future listings of ADQ portfolio companies could further deepen the market. ADX’s growth directly serves the vision’s objective of building a large, empowered private sector by providing the capital markets infrastructure that private enterprise requires.
For Bahrain, the Bahrain Bourse serves as a domestic market for savings and investment but lacks the scale to drive economic transformation. The exchange’s contribution to Vision 2030 is incremental — providing listing venues for growing companies, supporting corporate governance standards, and offering Bahraini investors access to domestic equities. These are useful functions. They are not transformative ones.