TRANSPARENCY AND AWARENESS ARE THE KEYS

Majeed Dawood, believes that there is a lot of room for improvement in the Pakistan market

By Khurram Baig
Nov 03 - 09, 1997

Majeed Dawood is the head of capital markets at Arif Habib Securities, a house that is not new on the local scene but now has plans that are really big and if all goes well are designed to make this firm among the biggest of the local brokerage houses.

The securities house has brought in Majeed Dawood as well as a number of other professionals under its fold simply for this purpose and among the first things that they are doing is the setting up of a comprehensive research practice which is already well underway. Faysal Sheikh, deputy head of capital markets at Arif Habib Securities and one of the best minds in business has been with them for a long time now and PAGE had a talk with them to find out not just their plans for Arif Habib Securities but also to get their views on the local market.

Faysal says that they intend to not just be the prominent local player but have plans of branching out into the region and develop a portfolio that is based on regional rather than just local investment. Majeed Dawood says that while at present they are concentrating on developing a good research house, a joint venture with a prominent foreign brokerage house somewhere down the line cannot be ruled out.

They both are confident that as far as reputation and credibility is concerned the house should face no problems because Arif Habib, is one of the most respected brokers on the local capital market and has been around for two decades. And they are probably right because while it is hard to find a broker with a totally unblemished record, Arif has a better record than most. So far he has not converted his membership into a corporate one and therefore the house simply handles his share business as opposed to actually trading in equities, this is part of the plans and is expected as soon as the government fulfils its promise of granting one time exemption to corporatization of memberships.

Apart from this Faysal Shaikh said that they are expecting their forex license shortly and this will be another step forward for the house which as we have mentioned has been here for more than three years but was never in the front ranks.

Majeed Dawood is keenly in favour of increased research in the local market and says that the house intends to develop a database also to help them in conducting more extensive research. He said that they will build their own database as opposed to acquiring one from outside sources.

They intend to develop a reputation for reliable portfolio management and then might launch a mutual fund but while it is a possibility, it is not in their immediate plans. Among other plans are to get a larger stake of the privatization business in Pakistan as well as financial advisory. They already have experience in this line and have worked with James Capel and Bankers Equity in the past on various projects. Both are confident that soon their corporate finance revenues should be at par with those of KASB and Jahangir Siddiqui. However both Majeed Dawood and Faysal Shaikh stressed that while financial growth is important to them, the house will hold first and foremost the development of a reputation for reliability and credibility.

Majeed Dawood and Faysal Shaikh welcomed the CDC and the KATS, saying that they would go a long way in triggering the growth of the local markets. Majeed was especially appreciative of the KATS, because he believes that transparency and the improvement in investor confidence is very important if we wish to increase investment in the local market. Faysal said that foreign investors did drive sentiment but they are rarely long term investors and that is why we need to encourage local investors to come in with more and more funds.

He also said that more members should go for corporatization because as globalization in business grows, the needs of the market place will change with it. He said that the individual member will find himself lacking in many areas and will find himself falling short on numerous occasions. Majeed also agreed that as institutional investors enter the market more and more, corporate members will be at an advantage. However both said that individual members would always be around to cater to the needs of small investors.

Faysal and Majeed are just two cogs in the whole setup at Arif Habib Securities, a house that aspires to be up there with all the foreign houses in business in Pakistan. They have now developed a research base, are improving their sales desk and will soon be venturing into the money market as well. They are very upbeat about the future of the local market and believe that it has matured at a satisfactory rate but also say that a lot still needs to be done.