ARIF HABIB INVESTMENT CELEBRATES THE FIRST ANNIVERSARY
The company offers specialized debt and equity funds and a wide range of retail products
By SHABBIR H. KAZMI
Mar 17 - 23, 2003
Arif Habib Investment Management (AHI) created a new chapter in Pakistan's equities market in March 2002 with the launch of its two funds, Pakistan Stock Market Fund and Pakistan Income Fund. Total funds under it management crossed Rs 2.2 billion. It created a record by announcing its first dividend on July 01, 2002, within 24 hours of the end of the accounting year and without even a day's stoppage of redemption or sales. The effort to achieve one milestone after another continues.
Arif Habib Investment Management (AHI) is a registered asset management company. The main sponsor of AHI is Arif Habib Securities with capital reserves of over one billion rupee, as on December 31, 2002. The company's technical partner, World era, is a mutual constancy affiliate of Star Series Advisors. Th international arm and subsidiary of Convergent Capital Management (CCM) is also the equity participant.
Pakistan Stock Market Fund (PSM) provides investors a facility to invest through one simple transaction into a range of Pakistan's high yielding liquid shares. The PSM Fund allows investments of small or large amounts to benefit from investment opportunities that are typically available to large rupee investors and specialists. Investors could join or leave the PSM according to their convenience.
The PSM has a strong correlation with the KSE-100 index. However, it is mostly outperformed the index. As of February 2003 Net Assets under management fell by 6% over the month. However, in comparison, the PSM's NAV dropped by 5.5%. During this period KSE-100 dropped from 2,545 level to 2,400, a decline by 5.72%.
Pakistan Income Fund (PIF) provides investors an opportunity to invest in a portfolio of money market investments such as spread transactions, carry over transactions; investment grade debt securities; money market instruments and short maturity reserve repurchase transactions. The PIF is an investment scheme, which investors can join and leave at their convenience. It has been designed to provide investors with the convenience and flexibility that meets their individual needs.
On February 28, 2003, Funds under management reached the Rs 1.1 billion mark. NAV grew by 15% as inflows continued. The PIF has 65% of its Net Assets allocated to short-term COT, unchanged from the previous month and 16% in TFCs with no change. Demand for short-term funds shrunk drastically — the average COT value for February was Rs 5.7 billion a day, half of the previous month's average value of over Rs 10 billion. Downward pressure on rates is due to a money market awash with liquidity — long-term bonds are at record lows due to high capital inflows and weak credit demand.
In December 2002, AHI acquired the management of KASB Premier Fund from Khadim Ali Shah Bukhari & Company. It is closed end fund that has about Rs 475 million assets under its management. On December 31, 2002, the Fund has 68% of its Net Asset Value, invested in stocks. It has earned a profit of Rs 163.413 million (including Rs 121.259 million related to unrealized appreciation in market value of securities classified as held for trading) as against a loss of Rs 32.45 million during the corresponding period last year. The company has realized capital gains of Rs 31.37 million as compared to a realized capital loss of Rs 34.17 million in the corresponding period of year 2001.
The AHI has also launched an open-end mutual fund, MetroBank — Pakistan Sovereign Fund (MSF), on March 01, 2003. The MSF, a strategic alliance between Metropolitan Bank Limited (MBL) and AHI, has been launched with a core capital of Rs 250 million. It will offer and redeem Units on a continuing basis. The MSF provides investors the facility to invest in an underlying portfolio of government securities and certain other authorized investments, managed by the Management Company in consultation with MBL as to the risk parameters.
Metropolitan Bank has also been appointed Trustee of the Fund. The Trustee will take into custody and/or its control all property of the Fund and hold it in trust for the Unit holders and the cash and registerable assets shall be deposited or registered in the name of, or to the order of the Trustee. The Trustee will also provide custodian service.
The financial products offered by AHI include Monthly Saving and Pension Plans, Monthly Income Plans, and some innovative Plans with unique features targeted towards small and large individual investors with different risk appetites and investment objectives. Selected branches of Bank AL Habib, Standard Chartered Bank and Union Bank are distributors of PSM, PIF and other investment plans.
To offer the best services to its clients AHI has developed a strong team of MBAs, Chartered Accountants, ACMAs and people from other disciplines. It has an experienced research team that carries out its own independent research and also benefits from the input of others as well. The company makes the best use of technology. Specially designed software helps the company in operations, asset allocation and marketing. It follows self-imposed continuing compliance audit throughout the year.