Last year was a challenging one for Bahraini listed companies, which presented poor  performance in terms of profitability, according to research by Gulf Investment House.

This performance can be attributed to weak earnings reported by investment companies and banks, which are overweight in the Bahraini stock market.

Listed Bahraini companies witnessed losses amounted to around BD71.5 million last year as compared to collective net profit of BD139 million the previous year, the investment bank report said.

In terms of sectoral earnings growth, only two sectors experienced an increase, while the remaining four recorded either a loss or a decline in their profits.

The lowest profit growth was witnessed in the industrial sector, which managed to register an annual growth of 27 per cent to reach BD2.3 million last year, the report said.

Another positive sectoral performance was seen in insurance, which was the only sector that turned its 2008 losses into gains last year.

Aggregate net income for listed Bahraini insurance companies reached BD28.3 million last year, as compared to a loss of BD17 million in 2008.

On the decliners' front, the investment sector witnessed the worst performance reporting higher annual losses last year that amounted to BD425.8 million compared to a BD262 million net loss recorded in 2008.

These negative earnings were mainly due to huge losses reported by two major investment banks.

The banking sector, which contains seven banks, registered a net profit decline of 35.1 per cent last year.

Out of these seven banks, four decreased in profit, two increased, and one bank incurred losses.

Like many banks in the GCC, Bahraini banks suffered from deteriorating assets quality, which was reflected by higher credit provisions and investments write-downs thatwere the main cause for the overall weak sectoral performance.

The services sector profitability witnessed a modest decline of 4.5 per cent, recording an aggregate profit of BD149.5 million last year.

The hotels and tourism sector profit was down by 9.2 per cent. It reached BD18.9 million compared to BD20.8 million recorded in 2008.-TradeArabia News Service