Bahrain-based Securities and Investment Company (SICO) posted a loss of BD627,000 ($1.7 million) in the first quarter of the year against a profit of BD1.28 million for the same period of 2010.

Operating income was down from BD2.239 million to BD459,000.

The loss per share was 1.5 fils on a year-to-date basis, against a profit of 3 fils for the same period of the previous year.

'The slowdown in revenues and operating profit reflects the effect of the political uncertainty in the Middle East And North Africa region and excessive volatility in regional equity and fixed income markets,' a spokesman said

'While January and February were loss-making months, the markets rebounded in March and the firm was able to recover partially its losses,' he said.

SICO maintained a strong capital base ending the quarter, after paying a BD2.552 million dividend, with BD54.471 million in shareholder equity compared to BD56.746 million at the year end.

SICO's posture continues to be prudent, with a strategy that remains focused on maintaining a strong balance sheet, placing it to take advantage of opportunities and capitalise on market recovery.

'With considerable political uncertainty and volatility in regional markets during January and February, our firm was affected during the first quarter, as almost all our revenue generators saw a substantial reduction in flows,' said chief executive officer Anthony Mallis.

'Although we will continue being affected by unusual market volatility if greater levels of uncertainty continue, we are confident that SICO is well placed to benefit from market opportunities that are arising, backed by our well capitalised position and fundamentally sound business model,'  Mallis said.

'While January and February witnessed major falls in the regional stock and bond markets, which had a bearing on this quarter's losses, the improvements seen in March, lead us to believe that the markets are somewhat stabilising,' he added.

SICO closed the first quarter of 2011 with assets of BD94.9 million compared with BD81.228 million at the year-end of which cash and deposits made up 53.8 per cent compared to 43.5 per cent at the end of 2010.

Total expenses, which include, staff overheads and general administration and other expenses, grew in the first quarter to reach BD1.086 million from BD959,000 in the same period last year.-TradeArabia News Service