Bahrain Stock Exchange Weekly Securities & Investment Research

GCC markets continued to be in a mixed mood last week. Saudi Arabia, Kuwait and UAE posted gains of 3.7%, 0.8% and 0.3%, respectively, while Oman fell by 1.4%. BSE index registered a fall of 0.7% on thin trading (volume down 41.5% compared to last week). Advance /decline ratio also deteriorated to 4:11. Bahrain Saudi Bank (BSB) announced its 1H99 results last week which show a profit growth of 5.25% over the same period last year. The loans and deposits increased by 6.5% and 4.3% respectively, compared to FY98 end. Despite this increase in loans, interest income registered a fall of 5.3% indicating a drop in the average yield. However, the net interest income almost remained at the last year's level (decreased by only 0.3%). Most of the growth in the net profits was accounted for by a rise of 8.3% in non-interest income and 40% lower provisions compared to the corresponding period last year. The second bank to announce interim results was Faysal Islamic Bank (FIB). The 1H99 net profit of $5.3m, announced by FIB, is 33% higher than the full year profit of 1998 ($3.9m). This improvement is mainly the result of much lower expenses and provisions. BSB and FIB were both unchanged for the week. In the tourism sector Bahrain Tourism Company (BTC) and National Hotels Company (NHC) announced their 1H99 results. BTC reported a drop of 23.6% in net profits compared to the corresponding period last year. Most of this decline was due to a fall of 14.4% in the gross revenues which nullified the positive effects of lower operating expenses and higher investment income. NHC was successful in reporting an increase of 3.8% in net profits for 1H99 - thanks to a 8.9% fall in operating expenses and a relatively lower (5%) decline in gross revenues. It is worth noting that Bahrain Promotions and Marketing Board has recently announced that the tourism levels in Bahrain improved by 9.4% in 1H99 compared to the same period last year. BTC and NHC were also unchanged for the week. The Net Asset Value of SICO Selected Securities Fund as of 5th August was 100.1 fils (0.3% decrease from the prior week).