Mumtalakat not to join Gulf spending spree
Manama, April 30, 2013
Mumtalakat has no plans to sell stakes in domestic companies and will be focusing on its existing portfolio and could even increase its investments, said its chief executive Mahmood al-Kooheji.
One of the smaller sovereign wealth funds in the Gulf region with $7.1 billion of assets under management at the end of September, Mumtalakat holds stakes in 40 firms in the state's non-oil sector, including Bahrain Telecommunications Company (Batelco) and Aluminium Bahrain (Alba).
Last year, chief executive Mahmood al-Kooheji said Mumtalakat could divest stakes in these firms to raise cash to invest in Bahrain's economy, such as through public share sales - Alba was listed in 2010, for example.
On Monday, however, Kooheji said it was not ruling out such moves later but it didn't have any current sale plans.
"In fact, I'm keen on putting more investment in them and improving them as I think they have a lot of potential," he said. Still, while the fund was happy to put equity into firms it wouldn't raise debt on their behalf, he said, contrary to how other state-linked entities have done in the Gulf.
One exception would be Gulf Air, the embattled Bahrain-based carrier, which wouldn't receive any funds from Mumtalakat as the government had allocated BD100 million ($265.3 million) from the state budget to go to the airline in 2013, with a further BD75 million in 2014, Kooheji said.
Gulf Air has been a major drag on Mumtalakat in recent years and was the main reason behind it posting a KD270.6 million loss in 2011.
The airline has struggled against the competition of Middle East carriers like Emirates, Etihad Airways and Qatar Airways, as well as the impact on Bahrain from the Arab Spring-inspired protests which erupted in the kingdom in 2011 and continue on an-almost daily basis.
Kooheji said Gulf Air planned to pursue codeshare agreements with other airlines outside the region to help it compete and was still searching for a chief executive for the airline after Samer Majali resigned in November.
In terms of international investments, the fund was looking at some opportunities but would only invest on a selective basis, Kooheji said.
Gulf-based funds have been extremely active in buying up prime assets in Europe and the United States in recent years - aided by high liquidity from hydrocarbon sales and depressed valuations in the West - with sovereign wealth in countries like Qatar seen as a first port of call for those divesting assets.-Reuters
More Finance & Capital Market Stories
- NBAD approves 40pc cash dividends
- NBAD sees 8-10pc loan growth
- Al Basel Group launches investment arm
- Union Insurance posts $18m profit
- Oman warns banks on conflicts of interest
- Japan to lend Tunisia $480m
- 400 to join anti-laundering seminar in Riyadh
- Lebanese insurer to head Prague Club
- UAE's first REIT plans $135m IPO
- Bahrain banking industry outlook 'positive'
- New India Assurance opens Bahrain branch
- Qatar sets up mixed business incubator
- Kuwait budget spending up 8pc in April-Jan
- Thomson Reuters to host Mena IFR awards
- ADIB offers smartphone industry investment
- Gulf Finance House to start $3bn Tunisia project
- KFH completes ICT project upgrade
- Egypt urban annual inflation slows to 9.8pc
- BIBF signs deal with Palestinian institute
- Bahrain’s GDP set to expand 12pc
- KFH-Bahrain rebrands priority banking
- Bank Nizwa wins top Islamic bank award
- Qatar labour costs may jump: IMF
- Kuwait Q3 trade surplus hits $23bn
- Dubai trade growth up 7.6pc to $362bn
- Deloitte appoints new managing director
- Al Ramz tops UAE trading in Feb
- IFC in $150m loan deal with Bank Audi
- SME funding focus for Abu Dhabi forum
- Insurance House posts second year of profit