The Manama-based TAIB Bank is putting plans to set up a GCC equity investment fund on hold for at least the next three months because of an increase in activity on the local stock market.

'We're putting this on the back burner for the time being,' a bank official says, adding that the bank is being kept busy with trading for client accounts. 'TAIB is interested in setting up a fund at the right time, and the right time may be early next year.'

The Bahrain stock market has risen sharply in recent weeks on a combination of earnings by companies, notably investment banks, higher oil prices and a relatively stable local political outlook. Large and medium-sized investors, some from outside Bahrain, have entered the market

and increased liquidity, which had been one of the aims of the planned fund (MEED 6:9:96).

'This doesn't undermine the rationale of the fund, but it undermines the urgency,' the official says. 'It's still a good idea: the market definitely needs a fund to mobilise small investors.'