Bahrain's leading telecom services operator Batelco Group has appointed Sico as the designated market maker for the company’s ordinary shares listed on the Bahrain Bourse.
The Batelco move comes following the recent approval from the Central Bank of Bahrain (CBB) and Batelco’s shareholders during their general meeting held on March 29, 2018.
This approval will help Sico to manage the market making activity with the prime objective of creating a dynamic two-way market that will enhance liquidity and reflect more accurately the true value of Batelco’s shares, said a statement from Batelco Group.
The market making mandate will be subject to holding no more than 3 per cent of the total issued shares.
Batelco Group CEO Ihab Hinnawi said that the successful implementation of its transformational strategy has led to the group’s strong performance throughout 2018.
"The objective of entering into the market making programme is to enhance liquidity over time to reflect the share’s intrinsic value and the company’s solid performance," remared Hinnawi.
Sico CEO Najla Al Shirawi said: "We are extremely honoured to be working with a market heavyweight such as Batelco which is the largest listed telecom in Bahrain with a market cap of $1.2 billion and a current 6.2 per cent weightage on the Bahrain Bourse All Share Benchmark Index."
"We are certain that any increase in Batelco’s share liquidity will enhance investors interest in a stock that trades at a PE of 7.6x (annualised), which is cheaper than other GCC telecom peers and at the same time offers high Dividend Yield of 9 per cent. Accordingly, active market making purpose will be to reduce such a valuation discount," explained Al Shirawi.
The current market making agreement between Batelco and Sico will commence on January 20, 2019 and will remain in effect until June 26 with the option to extend subject to CBB approval.