Esterad Investment Company (BSC) ratings affirmed

Esterad Investment Company BSC (Esterad) 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 Esterad's strong income generating capability. Asset quality is sound although some asset concentration is apparent, mainly to the GCC market. This however reflects the Company's 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 BHD11.38m ($D30.2m) 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.