x Abu Dhabi, UAETuesday 25 July 2017

Bahrain's financial centre brought to a standstill

As Bahrain declared a three-month state of emergency the nation's financial heart remained still, virtually deserted as protests continued.

Cars pass garbage containers thrown onto the road to prevent riot police from entering the street in the centre of Manama yesterday.
Cars pass garbage containers thrown onto the road to prevent riot police from entering the street in the centre of Manama yesterday.

Bahrain Financial Harbour, the heart of the country's banking and finance industry, was virtually deserted for the third consecutive day yesterday.

As protesters blocked access to its twin towers, the kingdom declared a three-month state of emergency.

All bankers and investment executives had stayed away from the buildings, security staff said.

Much of King Faisal Highway, running through the heart of Manama's commercial area, was impassable. Protesters' barricades prevented access to the arterial road and the central business district next to it.

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Five-star hotels in the protester-occupied area, such as the Sheraton and the Regency, were empty except for security staff. In the diplomatic area, many guests were checking out of hotels hurriedly as a planned protest march to the nearby Saudi embassy got under way.

"We have a couple of hundred rooms and four guests", said the manager of one international chain, who wished to remain anonymous.

The security company Control Risks was organising the evacuation of several international businesses.

King Hamad bin Issa Al Khalifa proclaimed a state of emergency for three months after Saudi Arabian and UAE troops entered the country to help keep the peace.

The cost of insuring Bahrain's sovereign debt has soared this year, breaching 333 basis points at one point, almost double the 185 basis points at the start of the year.

The kingdom's industrial activity is also under severe pressure as a nationwide strike of Bahraini workers is ongoing.

The workers include those at Bahrain's two largest companies, Aluminium Bahrain (Alba) and Bahrain Petroleum company (Bapco), although both companies denied any disruption was taking place.

"From an operating point of view, we are supplying to all our customers and we are still exporting," said Khalid Ebrahim Sabbagh, the general manager of the marketing division at Bapco, but he conceded "things could change minute by minute" as the situation on the ground evolved.

Alba reiterated it was operating at full capacity and that contingency measures were in place "for any eventuality if and when the need arises".

"The only contingency measure taken by Alba up until now was the adjustment of the organisation's workforce shifts," it said.

As many as 300 non-essential staff joined in strike action, the head of the Alba workers' trade union said on Monday.

Abdul Kadir Shihabi, the head of operations at a Bapco refinery who is on the board of the trade union, said he had rallied enough staff to shut down up to half of the petrol stations controlled by Bapco and some of the company's exporting activities.

Mr Shihabi said the strike was not intended to halt industrial activity entirely but to force Bapco to reduce its production.

"It is not a 100 per cent shutdown, because our local residents need cars, hospitals, gas and electricity to be available, but we need it to affect shipping," he said.

Bapco, which is state-owned, produces 250,000 barrels of oil per day, with more than 90 per cent shipped abroad, while Alba operates one of the world's largest single-site smelters with an annual production capacity of 870,000 tonnes.

The Bahrain Stock Exchange, the smallest and most illiquid in the Arab world, continued trading from emergency premises for a third day as protesters blocked access to its Financial Harbour premises.

Ali al Mansoor, a spokesman at the exchange, said the average daily turnover was still within the normal range, despite a 20 per cent slump in the volume of traded shares compared with normal levels.

The measure ended up 1.3 per cent yesterday but some commentators warned the market was not a real reflection of investor sentiment because it was so illiquid.

 

fkane@thenational.ae