'We realise that, with the sale of GIB and with our new asset/capital structure it is wise to have a fresh source of medium-term financing,' says a senior GIC official. No decision has yet been taken on what kind of funding is envisaged, or its scale. GIC does not rule out appointing an adviser for the transaction as a means to guarantee transparency.

The company, which is owned equally by the six GCC states, on 16 April announced its financial results for 2001, showing net income of $85.3 million. The figures are not strictly comparable with the 2000 results, which incorporated the activities of GIB. However, the company says that operating revenues almost doubled to $100.5 million, while related expenses remained at about the same level. GIC was also able to generate major increases in net interest income and earnings from projects and private equity participations. 'The corporation's prudent decision to almost entirely exit the global equity markets proved beneficial,' GIC said in a statement.

'On a year-on-year basis, despite a 70 per cent reduction in contributions from the subsidiary [GIB], post-sale, the corporation's operating income prior to provisions reduced by only 10 per cent,' said chief executive officer Hisham al-Razzuqi.

GIC's total assets at the end of the year reached $5,541 million, with shareholders' equity at $1,152 million. It has declared a dividend of $75 million in total for 2001. Some 42 per cent of GIC's total assets are invested in the GCC. The focus on investment in the immediate region will continue in the coming period. The new strategy, based on recommendations from McKinsey & Company, will entail increasing direct investment in new and existing projects and companies, particularly in the GCC.