Sheikh Fahad Bin Faisal Al Thani, the Chairman of the Board, declared that GIC has achieved a record profit of US$ 155 million during the first half of 2005 exceeding the net profit of the whole of 2004 by US$ 20 million and the first six months of 2004 by US$ 75 million.
Sheikh Fahad said that the positive outcome of the new strategy adopted by GIC since 2001 is now witnessed in the noticeable growth in the corporation’s profitability and the size and diversity of its business.
Sheikh Fahad added that as a result of the clear strategic plan and the effectiveness of managing the different types of risks, the credit rating agencies have upgraded the rating of GIC twice during the six months. Standard & Poor’s upgraded GIC from BBB+ to A- last April and Moody’s upgraded the corporation by two notches from Baa1 to A2 in June. The corporation was upgraded four times in the last three years.
Moody’s commented in their report positively about GIC’s unique business model, the high percentage of liquid assets in addition to the efficient operating environment and the improved other sources of income. Standard & Poor’s reported favorably on the strength of its capital base and the expected continuous support from its shareholders of the governments of the Gulf Co-operation Council.
Mr. Hisham Al-Razzuqi, GIC’s Chief Executive Officer, said that the diversification of sources of income has had a considerable impact on GIC’s performance during the first half of 2005. He added that the investments in projects in the Gulf region have achieved outstanding results and recorded a net income of US$72 million which represents 46% of the corporation’s net profit for the period. This is in addition to the income realized in the different investment activities in the Gulf region and internationally.
The period also witnessed a successful launch of the second tranche of the US$500 million EMTN program and the US$200 million syndicated loan. These two issues formed a part of the financing plan prepared by the corporation in order to reduce the maturity gap between the different assets and liabilities. This financing plan was positively appraised by both Moody’s and Standard & Poor’s.
Mr. Al-Razzuqi explained that the total issues during the last eight months amounted to US$1200 million, have been received very favorably by Financial Institutions both in the Gulf and Internationally. The issues were over subscribed by 150% and geographically distributed between Europe and Asia 75% and the Gulf region 25%.
The corporation continues to develop and launch new investment products that cover the entire capital market in the Gulf region. In March 2005, GIC successfully launched the first Gulf Bond Fund following the successful first Gulf Equity Fund. The equity fund has achieved a remarkable return of 61% during the first six months of this year and 237% since its inception in April 2003.
During this period the Corporation concluded a study regarding the development of the capital markets, with the aim of achieving more integration. This study was prepared in co-ordination with the General Secretariat of the GCC Council.
Sheikh Fahad Al Thani, the Chairman of the Board, explained that these remarkable results are the outcome of the full cooperation and understanding between the Board and the Management and the hard work and dedication of all employees.
Established under the auspices of the GCC in 1983, GIC is equally owned by the governments of the six GCC member states: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The Corporation focuses on the development of private enterprise and economic growth in the Gulf region, as well as offering financial products and services.
