Media ININ Economy We Trust
Media IN Manama, May 22 (BNA):
As part of its efforts to enhance market liquidity, Bahrain Bourse announced the implementation of a new tick size framework which aims to unify all categories of listed financial instruments (excluding Debt and Treasury-bill securities) at BD 0.001 and $ 0.001.
A tick size is the minimum price movement of a trading instrument. Tick sizes generally are based/measured in decimals.
The new tick size framework has been designed to mitigate investors risk in the event of price drops and limit excessive disruption to the market. Investors will also be able to place orders with smaller fractions, which will enable investors to mitigate risks.
The new tick size which came into effect on 19th of May 2019.
With the change of the tick size, prices of financial instruments (excluding Debt and T-bill securities) traded on Bahrain Bourse will be determined with a greater precision.
This would help narrow market spreads (the difference between the ask price and the bid price) and ensure a more precise market valuation of the instruments.
The change will be particularly relevant for companies with lower market capitalization, for which a price change by BD 0.001 (or US$ 0.001 for companies traded in USD) represents a major percentage change in value.
