The next 12 months do not look very promising for the global economy, according to Investcorp executive chairman and chief executive officer Nemir A Kirdar.

Kirdar said the turmoil the US, the world's largest economy is facing is bound to have a cascading effect elsewhere.

Speaking after the investment bank's annual meeting on Wednesday, Kirdar said the US accounted for more than 25 per cent of world gross domestic product facing difficulties.

'The housing market in the US is in turmoil and Japan, India and the Gulf states are all facing inflation problems and then there is the problem of food prices,' he said.

'I thing 12 months is too short a period to see a total change in all that but I remain an optimist longer tern and we have already seen stronger growth than expected in the second quarter in the US.

'Against a backdrop of global economic turmoil and extraordinary depressed financial markets, Investcorp is pleased to report another successful year,' he said.

'The fiscal year to the end of June was Investcorp's second most profitable year ever, and a record for fund raising.

'Invescorp's performance highlights the contrast between the booming economies of the Middle East, the heart of Investcorp's client franchise, which have led to a positive fund raising environment, and the turbulent market conditions across the US and Western Europe, Investcorp's primary investment markets, which have led to lowered asset returns and reduced deal volumes.'

He said that at Investcorp having a strong balance sheet was more important than net earnings.

'Making high profits is easy but it is our strong balance sheet which drives our business,' he added.

He said that in spite of the economic climate of the past year, Investcorp was still able to pay its highest ever dividend this year.

'Out of net income of $151.1 million Investcorp is proposing to pay $63.3m, or $90 per share, as ordinary dividends, an increase of 20 per cent over last year,' he added.- TradeArabia News Service