BHB adopts T-Bills trading guidelines

Bahrain Bourse (BHB) has adopted guidelines on the Trading of Treasury Bills (T-Bills) at the Bourse, a bourse statement said yesterday.

A resolution regarding this was issued by Chief Executive Officer of Bahrain Bourse (BHB) Shaikh Khalifa bin Ebrahim Al Khalifa yesterday.

According to the guidelines, investors can submit their orders to the brokers to enter them in the T-Bills Market through the Automated Trading System that will match the buy and sell orders in accordance with the principles for matching orders as per the “Matching Priority” Rule of BHB.
The minimum accepted order in the T-Bills Market is BD5000 (Five Thousand Dinars) or its equivalent in the T-Bill currency.

In addition, the guidelines determine the pricing and settlement mechanism implemented in the T-Bills Market, in which the Automated Trading System will automatically calculate the full value of the T-Bills in each transaction individually calculated until the settlement date based on the duration the T-Bill has been held.

The settlement day for the trades is two days following the trade date (T+2). The guidelines also stipulate that the daily price variations (up or down) is limited to a maximum of 5 per cent of the previous closing price.

T-bills are issued through a competitive bidding process at a discount from par, which means that rather than paying fixed interest payments like conventional bonds or Islamic sukuk, the appreciation (movement) of the T-bills toward maturity provides the return to the holder until he gets the full par value of the T-bills at maturity.

Commenting on the move, Shaikh Khalifa said that the T-Bills Market is one of the joint initiatives between the Central Bank of Bahrain (CBB) and Bahrain Bourse that aims to enhance and develop the capital markets sector in the Kingdom of Bahrain and increases the depth of the market by offering investors with more investment options.

Trading in Treasury Bills will be conducted during the trading session of BHB, from Sunday to Thursday between 9:30am and 1:00pm.