BFX hunting for strategic investor

The Bahrain Financial Exchange (BFX), fully owned by India's Financial Technologies (FT), will sell stake to regional or international financial institutions to bring in a strategic investor, a senior executive said.

The Bahrain Financial Harbour-based exchange – which is slated to start operations in the first quarter of 2010 – aims to start commodities and currencies futures trading.

The exchange is in discussions with institutions in the region and around the world to sell a minority stake, BFX Director Arshad Khan told Emirates Business.

"The stake sale will be of a few per cent as we don't want to lose control," he said, adding that a stake sale is not intended to raise funds but to bring in a partner who can add value. "FT is in the business of setting up exchanges; we start an exchange as a fully-owned firm then at the right stage of the project we bring in a strategic shareholder by diluting a bit of the equity. We look for a strategic partner who can add value to the exchange; it's not that we need money," he said.

"In the case of BFX, we'll also follow the same trend by going to the right shareholder. At this stage, we are evaluating bringing in an international or regional financial institution as stakeholder who can add value," said the BFX director.

The exchange will issue shares to the public after three to five years, but it's too early to say how much stake would be offloaded by FT, he said. The exchange is also negotiating (MoUs) and cross-listing issues with their peers in the Western markets.

"We're planning partnerships and MoUs with leading European and American exchanges just like our Indian exchanges have. These partnerships are basic MoUs and cross-listings," he said.

FT has four exchanges in India, one each in Singapore, Dubai, Mauritius, Africa and now in Bahrain.

"Right now we are busy with the launch of the exchanges in Singapore and Mauritius. They have started their membership and listing campaign. They should hopefully commence trading by the fourth quarter of this year," said Khan.

"We are also exploring opportunities in other regions but are not yet at a stage where we can talk about it," he said.

 

Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here.