Bahrain wealth fund to keep inward focus for now

A car drives past Jordanian and World Economic Forum flags on the way to the King Hussien convention center at the Dead Sea May 14, 2009.

SWEIMEH, Jordan (Reuters) - Bahrain's sovereign wealth fund said on Friday it would focus for now on its domestic investments, including Gulf Air, but would be on the lookout for global investments in sectors like tourism.

"Right now, my focus really is on the existing portfolio companies which is mostly in the Bahrain market," Mumtalakat Chief Executive Talal al-Zain said in an interview at on the sidelines of the World Economic Forum in Dead Sea, Jordan.

"I'm just taking advantage of what's happening and just investing within my portfolio company," Zain told Reuters.

Sovereign wealth funds in the oil-exporting Gulf Arab region have scaled down investments in Western companies since oil prices tumbled from peaks of almost $150 a barrel last summer.

As the global financial crisis brought to an end a regional economic boom, the "rainy day" funds took on a stabilization role for their domestic economies.

The Kuwait Investment Authority and Qatar Investment Authority, for example, have made key investments in domestic equities to help shore up ailing stock markets.

Zain said two blue chip Bahraini stocks, including Bahrain Telecommunications Co BTEL.BH, were among Mumtalakat's key local holdings. It also owns national carrier Gulf Air, which has been undergoing restructuring after making steep losses in 2007 that forced it to slash its workforce by about 25 percent.

"Today is the best time for us to invest in it. We're re-fleeting the company, restructuring the company, we're just ready for the uptick in the economy," Zain said.

"We're just benefiting from what's happening, because if I look at my existing portfolio of companies, what I'm doing is I'm investing in them to grow their value further."

FOOD, TELECOMS

As it strives to diversify its revenues, Mumtalakat would seek to target investments in commodities including food, financial services, telecoms and tourism in Asia, Europe and the United States, Zain added, without giving details.

"We are still looking at these areas, we believe that these areas can give us on a long-term basis good returns, we are long term investors," he said.

A downturn in valuations during the global financial crisis "will be reflected" in Mumtalakat's 2008 earnings, Zain added.

He had said in March the value of the fund's investments had fallen about 10 to 15 percent to around $10 billion. Bahrain's stock market fell 34 percent in 2008.

"If I can maintain my size, if I can produce a single-digit return (in 2008) it will be a great thing," Zain said on Friday.

(Additional reporting by Moira Sidoti; Writing by Daliah Merzaban in Dubai; Editing by)