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Wed 29 Jul 2009 12:52 AM

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Bahrain sovereign fund posts $183m loss in 2008

Mumtalakat hit by impairment charges linked to investments in GIB and GIC.

Bahrain's sovereign wealth fund Mumtalakat said on Tuesday it made a loss of $183m in 2008, mainly due to $981m in impairment charges linked to investments in two Gulf Arab financial institutions."Impairment charges of 370 million dinars ($981.4m) ... were booked during the period leading to a net loss of BD69.3m ($183.8m) compared to a net income of BD170m for 2007," Mumtalakat said in a statement.

It said the impairment charges were largely attributable to Mumtalakat's holdings in Gulf International Bank and Gulf Investment Corp, which are run by the six Gulf Arab states.

Total assets fell to BD4.8bn from BD5.3bn in the previous year and total equity declined to BD2.9bn from BD3bn, the statement said. Revenue increased 13 percent to BD1.45bn.

Mumtalakat's portfolio includes a 30 percent stake in Formula One team McLaren, and holdings in Aluminium Bahrain, Gulf Air, Bahrain Telecommunications Co and about 30 other firms, according to its website.

In April, Gulf International Bank said its six Gulf government shareholders had bailed it out by taking toxic assets worth $4.8bn off its books, including its exposure to collapsed US investment bank Lehman Brothers and other international securities hit by a global stock market rout.

Earlier this month, Fitch Ratings placed Kuwait-based Gulf Investment Corporation on ratings watch negative, citing "concerns that the willingness to provide ongoing support to GIC by the shareholders (in case of future need), may have weakened ..."  (Reuters)

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