JEDDAH, 2 July 2004 — A Pakistan Strategic Allocation Fund (PSAF) was introduced at a roadshow held here yesterday.
“The fund is available with an initial public offer at 10 Pakistani rupees per unit/certificate,” Arif Habib, chairman of the Karachi Stock Exchange, said in his presentation at the event, organized by the Pakistan Executives Group (PEG) at Marhaba Restaurant.
Pakistan Consul General Masood Akhtar and PEG President Muhammad Khaled were among those present. Group Secretary-General Munir Gondal in his welcome address referred to the rapid growth of the Karachi Stock Exchange and other Pakistani stock exchanges.
Arif heads the Arif Habib Investment Management Ltd. as chairman and chief executive, which manages the closed-end PSAF. In addition, Arif’s group has two other companies — Arif Habib Securities Ltd., a brokerage house and member of the Karachi, Lahore and Islamabad stock exchanges, and Asset Management Company that manages five mutual funds managing a total fund of over 10 billion rupees.
“We’re in the process of launching the closed-end PSAF with the fund totaling 3 billion rupees in the second week of July. Seventy-five percent of the fund is already committed to be subscribed by institutional and high net worth individuals of repute in Pakistan and abroad. Twenty-five percent of the fund is being offered to the general public for subscription. The fund has been fully underwritten by leading Pakistani institutions.
“Under the rules, in fact, we can offer 20 percent of the public offering to non-resident Pakistanis (NRPs) residing outside Pakistan. So we intend to offer 150 billion rupees to NRPs, which comes to only five percent of the total size of the fund,” Arif said, and sought the interest of Pakistani expats here in the fund.
“We’ve been serving a two-fold purpose — introduce ourselves outside Pakistan and provide opportunity to NRPs to access Pakistan’s stock markets through the fund,” Arif said.
“I want to convince the government back home that we can market our products outside Pakistan and that we’ve the capability to market our funds.” Arif Habib Investments Company currently manages Pakistan Income Fund, Pakistan Stock Market Fund and MetroBank — Pakistan Sovereign Fund as open-end funds, and Pakistan Premier Fund and Pakistan Capital Fund as closed-end funds.
The objective of the PSAF is to deliver maximum returns from Pakistan’s equity market, while diversifying and managing risks to an acceptable level, Arif said.
Listing benefits of investing in the PSAF, Arif said it allowed the investor to gain from the volatility in the market.
Using a unique fund philosophy, the benefit is derived by selling high and buying low on a daily basis. Use of fair values to determine buy/sell decisions allows the daily trading to be based on fundamental equity research rather than speculation, he added.
The use of an automated program to determine buy/sell orders adds an extra dimension of sophistication to the investment process, he said, adding that there have already been 75 subscribers whose contributions total 2.25 billion toward the PSAF. The fund has 18 underwriters including banks and securities, investment and leasing companies.
The fund has four investment categories — 5,000 rupees for 1,000 certificates, 25,000 rupees for 2,500 certificates, 50,000 rupees for 5,000 certificates and 100,000 rupees for 10,000 certificates, and multiples thereof.
Each category has a reserved allotment of 25 percent of the issue of 18.75 million certificates. “The fund will be a mix of equity and cash/money market investments,” Arif said.
“The bullish trend in the country’s stock exchanges is real, the exchange rate of the rupee against the dollar is stable, exports have increased by 22 percent and government revenues are up by 16 percent, and the Karachi Stock Exchange is trading one of the highest number of shares among Asian markets,” Arif told Arab News.
