Government's direct contact
with the management of various banks appreciated
Feb 14 - 20, 2000
The Finance Minister, Mr. Shaukat Aziz and the Governor, State Bank of
Pakistan, Dr. Ishrat Husain had a meeting with the Management of Pak-Libya to review
Pak-Libya's operations and the Company's present and future plans. In the meeting, Mr.
Zaigham Mahmood Rizvi, Managing Director, Pak-Libya was accompanied by Mr. Ramadan A.
Haggiagi, Deputy Managing Director of the Company. Pak-Libya was established as a Joint
Venture financial institution between the Governments of Libya and Pakistan. The Company
has an authorized capital of Rs. 4.0 billion, wherein the paid-up capital stands at Rs.
2.2 billion. While reviewing the performance of the Company, the Finance Minister highly
appreciated the growth of the Company's operations in the recent past, which is
demonstrated by the expansion of its Balance Sheet, profitability as well as the diversity
of its operations. The Company had an original subscribed equity capital of Rs. 1.0
billion, shared equally between the two Governments, wherein the total employed capital
including reserves has more than doubled since inception and currently stands at Rs. 2.2
billion. In addition to this, the Company has paid a cumulative dividend of Rs. 1.9
billion since its inception. The dividend payout is thus nearly twice the subscribed
capital of the Company. The Company enjoys a good Credit Rating which stands at "A
+" for Long Term and "D1" for Short Term investments. They were further
briefed on the manualization, systemization and computerization of the Company's
operations which are taking place in the Company. Currently, Pak-Libya is also in the
process of securing ISO-Certification. Referring to the stuck-up portfolio of the Company,
the Management is making the best use of support avenues now being provided by the
Government for vigilant and candid handling of default cases. It was noted in the review
that there is a general revival in the economy, wherein specific signs of improvement are
visible in the leading sectors like Textiles. The Minister encouraged Pak-Libya to
continue playing a pro-active role in development financing. The Management was motivated
to actively pursue its plans to encourage leading industrialists of the country running
good business houses, for further expanding their operations through BMR i.e. Balancing,
Modernization and Replacement. Pak-Libya would be approaching the top rated and successful
business houses, particularly in the textile sector, for long term project financing
support in their balancing, modernization and replacement plans. The Textile sector is
fully geared to play its traditional leading role in boosting the country's export
potential. The financial sector should meet its responsibility towards supporting good
business houses, the Minister stressed. It may be noted that while there are a few
defaulters/bad businesses who have damaged banking and financial sector of the country by
way of substantial loan defaults. A large number of good business houses have played a
dynamic role in the country's economic development over the years. They are the country's
hope for playing an even stronger role in industrial development in the current economic
challenges faced by the country. As such, the banking sector of the country should come
forward to lend further support to these highly credit worthy business houses in
reactivating their investment plans. Pak-Libya is fully geared to play its due role.
While reviewing Pak-Libya's role in the Capital Market Operations, with
particular reference to the promotion of Public Debt Instruments and the Mutual Fund
Industry, Pak-Libya was further encouraged by the Minister and the Governor, State Bank of
Pakistan to continue playing an important role in the area of Capital Market and resource
mobilization through listed instruments of finance. In order to develop the Public Debt
Market, Pak-Libya is in the process of floating listed TFCs. These TFCs will be floated
through a Special Purpose Vehicle (SPV) company. Pak-Libya is already having as its
associate, an Investment Advisory Company namely Asian Capital Management (Pvt.) Limited,
which is playing a major role in the promotion of Mutual Fund Sector of the country.
Pak-Libya is also a Co-Manager of an existing Mutual Fund namely Asian Stocks Fund. The
NAV of Asian Stocks Fund, during the last one year has moved up from Rs. 3.80 to Rs. 6.15
per share, showing a substantial growth of 60% during the year. Pak-Libya has also
promoted a Fixed Income Securities Fund in the name and style of Munafa Securities Mutual
Fund, with a paid-up capital of Rs. 150 million and is aimed at investing in low risk,
stable instruments of finance like TFCs. The Fund will attract Investor Groups desiring to
have a regular income stream, with a low risk appetite. Pak-Libya is also in the process
of promoting an I.T. Venture Capital Fund to promote the venture capital enterprises in
the I.T. sector. The Minister also appreciated Pak-Libya in its plans to float an I.T.
Venture Capital Fund, which is expected to make an important contribution in promoting
I.T. entrepreneurship in the country. It is also in the process of floating a Fund of
Funds i.e. a Mutual Fund specializing in investments in Mutual Funds only. The Minister
stated that these kinds of funds had played a very vibrant role in promotion of savings
and in the growth of Mutual Fund Market in Europe and Africa. Pak-Libya was assured of the
Government's support in such developmental activities to continue playing a dynamic role
in the country's Capital Market. As part of Pak-Libya's Corporate Advisory Services,
Pak-Libya alongwith AMZ Securities, are the Joint Financial Advisors to the Iran-Pak
Refinery Project, a gigantic investment of US$ 1.1. billion in the Refinery Sector. The
Minister assured that the Government of Pakistan gives great importance to this oil
refining project and would like to see it on stream.
During the meeting, the process of Islamization of Economy was also
reviewed. Pak-Libya is playing an active role in the development and promotion of Islamic
Instruments of Finance, which include a Rated and Listed Musharika (M-VIS) as well as
Infrastructure Musharika. The Management of Pak-Libya assured the Minister and the
Governor that it is fully geared to play a meaningful role in the design, development and
floatation of the Islamic Instruments of Finance for raising investment funds and making
At present, Pak-Libya is the only financial institution which has taken
a pro-active role and initiative in promotion of I.T. Sector and has sponsored an I.T.
Company in the name and style of Future Management Institute of Technology (FMIT). FMIT is
involved in education and training of I.T. professionals as well as providers of
Software/Network solutions with leading software development businesses and has already
undertaken some joint venture projects with European and American Companies.
Since one of the purposes of establishing the Joint-Venture Financial
Institutions like Pak-Libya was to promote trade between the two brotherly countries,
Pak-Libya has established a trading company in the name and style of Union International
(Pvt.) Limited (UIL). It is the first Company in Pakistan, which is based on e-commerce
concept and is also registered with the Import and Export Board in Libya. UIL will also be
concentrating in the African Market for boosting Pakistan's exports to the African region.
UIL will be maintaining business information portals on Pakistan based on e-commerce
approach and is fully geared to play an active role as an Export/Import House of the
country. It is contacting leading manufacturers and exporters of the country to approach
Libya and the African Market through the good offices of UIL.
The Managing Director, Pak-Libya, Mr. Zaigham Mahmood Rizvi highly
appreciated this initiative of the Finance Minister and the Governor, State Bank of
Pakistan and expressed optimism that such direct contacts with Management of various Banks
would supplement Government's plans for revival and strengthening of the economy.