Capital Intelligence, the international credit ratings agency, today announced that the long and short-term ratings for Bahrain-based Esterad Investment Company (BSC) (Esterad) had been affirmed at BBB and A2 respectively. The outlook for the ratings is stable.
Esterad Investment Company (BSC) is a well managed institution following a prudent investment policy and clear business strategy. Amid a recovery in regional equity markets, profitability rebounded in 2007 assisted by higher disposal and fair value gains. This performance produced robust returns highlighting Esterads strong income generating capability. Asset quality is sound although some asset concentration is apparent, mainly to the GCC market. This however reflects the Companys chosen investment strategy.
Although the asset base remains small, the little borrowing and other liabilities in relation to total capital underscores a strong and underleveraged balance sheet. Shareholders equity funded well over one-half of total assets. Esterad recently raised BHD11.38mn (USD30.2mn) in equity by way of a rights issue, equivalent to an 18.6% increase in shareholders equity. Liquidity remains high reflecting a large pool of quoted investment securities and cash. With the outlook for the regional economies remaining very favourable, the Company is well positioned to exploit investment opportunities as they arise.