LOM Holdings Ltd. yesterday said its net income more than doubled in the 2006 financial year as it recorded a profit of $1.65 million or 26 cents per share.

LOM chief executive officer Scott Lines said revenues slipped one percent to $12.8 million, but this was offset by a cut in operating costs, which were reduced 8.5 percent to $11.2 million.

Assets under administration grew 5.7 percent, but no full figure was given. In releasing its 2005 financial results last year, LOM said assets under administration had exceed the $1 billion mark for the first time ever.

LOM saw strong growth in its asset management division, Mr. Lines said, with revenues growing 17 percent over the previous year.

LOM said the results came after 2006 saw a good year for global equity markets, and predicted that commodity prices would continue to perform strongly.

But he warned that there were risks markets might unravel if the Japanese "carry trade" reversed in 2007.

He said: "Japanese interest rates have been essentially zero for a decade and have engendered the now well recognised and widely practised "carry trade" where funds are borrowed in Yen at low interest rates, sold into other currencies, primarily US dollars and used to invest in everything from US treasuries to real estate to private equity.

"This has resulted in a global phenomenon of unusually low real borrowing costs and allowed a massive increase in asset prices. The potential impact upon all asset classes should this carry trade reverse or rapidly unwind will be profound. This effect on the global markets may become a significant factor in the performance of global markets in late 2007 and through 2008."