Curious about ethical investment opportunities in Bahrain? Halal stocks offer Muslim investors a path to grow their wealth while adhering to Islamic principles.
In this article, we’ll delve into the dynamic world of Sharia-compliant investing in Bahrain, exploring both the opportunities and challenges that come with this unique market. Whether you’re new to investing or looking to diversify your portfolio, you’ll find valuable insights on balancing financial success with your faith.
List of 10 Halal Stocks in Bahrain by Market Cap
| Company Name | Ticker | Market Cap | Shariah-Compliance Status | Halal Ranking |
| GFH Financial Group BSC | GFH.BH | BD 1.26B | Halal | ★ ★ ★ ★ ☆ |
| Al Salam Bank BSC | SALAM.BH | BD 543.96M | Halal | ★ ★ ★ ★ ☆ |
| Ithmaar Holding BSC | ITHMR.BH | BD 151.89M | Halal | ★ ★ ☆ ☆ ☆ |
| Inovest BSC Public | INOVEST.BH | BD 138.49M | Halal | ★ ★ ★ ☆ ☆ |
| APM Terminals Bahrain BSC | APMTB.BH | BD 108.00M | Halal | ★ ☆ ☆ ☆ ☆ |
| Bahrain Islamic Bank BSC | BISB.BH | BD 63.49M | Halal | ★ ☆ ☆ ☆ ☆ |
| Khaleeji Bank BSC | KHALEEJI.BH | BD 62.43M | Halal | ★ ★ ★ ☆ ☆ |
| Solidarity Bahrain BSC | SOLID.BH | BD 49.33M | Halal | ★ ★ ★ ★ ★ |
| Eskan Bank Realty Income Trust | EBRIT.BH | BD 11.88M | Halal | ★ ★ ★ ★ ☆ |
| Takaful International Co BSC | TAKAFUL.BH | BD 10.88M | Halal | ★ ★ ★ ★ ★ |
Growth of Islamic Finance in Bahrain
The Islamic finance industry in Bahrain is well-established and expected to continue growing through the coming years. Factors such as banking consolidations, Sukuk issuance, and supportive regulations are driving this expansion.
At the end of 2023, the industry was valued at USD 77 billion, with Islamic banking assets representing 79% of that total. Sukuk issuance plays a significant role, with 90% of Bahrain’s sukuk rated ‘B+.’
Bahrain’s Islamic banks are expanding their domestic market share, growing from 38.4% in 2022 to 42% in 2023. However, the country faces challenges, including a concentrated financial system and reliance on external financial support.
Islamic banking assets grew by 46.4% in 2023, outpacing conventional banking assets. Bahrain’s Islamic banking market ranks tenth globally, reflecting its importance in the global Islamic finance landscape.
Source: Bahraini Islamic Finance Industry Well-Developed; 90% of Sukuk Rated ‘B+’
Expansion of Bahrain’s Islamic Banking Sector
Bahrain’s Islamic banking market is expected to exceed 50% of the total domestic banking sector in the near future. This growth will be driven by mergers, acquisitions, and increasing demand for Islamic financial products.
The acquisition of Ahli United Bank by Kuwait Finance House is a key factor boosting the sector. Once fully converted to Sharia compliance, the combined entity will be one of the largest domestic banks in Bahrain.
Islamic banking in Bahrain is the seventh-largest globally, with assets valued at USD 41.6 billion. The sector benefits from strong regulatory support, a Muslim-majority population, and skilled human resources.
Islamic banks in Bahrain also enjoy favorable prudential requirements, such as a 30% “alpha factor” that boosts their capital ratios. This advantage allows them to grow with less capital constraint compared to conventional banks.
Source: Bahraini Islamic Banking Penetration Solid, to Benefit from Consolidation
Summary
Bahrain offers diverse opportunities for Muslim investors through Halal stocks, supported by a strong Islamic finance sector. Growth is driven by banking mergers, Sukuk issuance, and favorable regulations.
The Islamic banking market is expected to surpass 50% of domestic banking assets, aided by the conversion of Ahli United Bank to Sharia compliance. Bahrain ranks seventh globally in Islamic finance assets.
Despite challenges like financial system concentration and reliance on external support, demand for Islamic finance products remains strong, fueling ongoing growth in the sector.
Disclaimer: The content is for informational purposes only and does not constitute financial advice. It is important to conduct your own research or consult with a financial or investment advisor. All logos or brands are referenced for identification purposes only and do not constitute an endorsement of any kind. This information is accurate as of the date of publication and may not reflect recent changes. Access our comprehensive legal disclaimers at musaffa.com/disclaimer.
