RAM Ratings reaffirms Gulf Investment Corporation’s AAA ratings

Published on 08 Dec 2022.

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RAM Ratings has reaffirmed Gulf Investment Corporation G.S.C.’s (GIC or the Corporation) AAA/Stable/P1 corporate credit ratings as well as the AAA/Stable ratings of its RM400 million Senior Unsecured Bonds (2008/2023) and RM3.5 billion Sukuk Wakalah bi Istithmar Programme (2011/2031). 

The ratings continue to incorporate support from GIC’s Gulf Co-operation Council (GCC) shareholders (particularly the United Arab Emirates, Qatar, Kuwait and Saudi Arabia), given the Corporation’s unique mandate of promoting the GCC region’s development. Higher oil prices and the benefits of ongoing policy reforms will support the fiscal balances and credit profiles of these sovereigns in the next one to two years.  

While the portfolio of investee companies under its Principal Investments division generally performed better y-o-y, GIC slipped into the red with a pre-tax loss of USD9 mil in 1H FY Dec 2022 (FY Dec 2020: pre-tax loss of USD35 mil; FY Dec 2021: pre-tax profit of USD130 mil) owing to mark-to-market and realised losses on equity and bond investments. We expect still-challenging financial market conditions to weigh on the Corporation’s earnings for the rest of the year. 

On balance, GIC’s low leverage and healthy liquidity position moderate the effects of its traditionally volatile income and riskier business model from owning equity stakes in investee companies. GIC’s leverage ratio and tier-1 capital ratio came up to about 1.2 times and 37.9%, respectively, as at end-June 2022 (end-December 2020: 1.4 times and 37.5%). Considering its commitment to maintaining a conservative capital structure, we expect the ratios to stay at around current levels. 

Large holdings of cash and interbank placements coupled with liquid investments held under the Global Markets division prop up GIC’s liquidity profile. These amounted to USD657 mil (after applicable haircuts) as at end-June 2022, exceeding total short-term funding of USD379 mil. The Corporation’s liquidity coverage ratio and net stable funding ratio were a respective 196% and 171% as at end-December 2021 (end-December 2020: 222% and 167%).


Analytical contacts
Amy Lo 
(603) 3385 2509

Sophia Lee
(603) 3385 2577


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2022 by RAM Rating Services Berhad

Rating Rationale

Ratings on Gulf Investment Corporation GSC