GROWING SUCCESS OF AL MEEZAN INVESTMENT MANAGEMENT LIMITED
July 25 - 31, 2005
The Mutual Funds industry in Pakistan has shown phenomenal growth in the past couple of years, increasing its assets under management from Rs. 18.95 billion in June 2001 to over Rs. 125 billion as on June 30th, 2005. It has been a success story based on conducive macro-economic climate, increased investor confidence in equity markets, ban on provident/pension funds from investing in National Savings Schemes (NSS), increased liquidity flows and a strong regulatory environment. With an increasing number of new entrants in the market, new funds with different risk and return structures continue to provide Pakistani investors with prudent and managed investment options. From fixed income to pure equity funds, the market has indeed responded to the needs of the conventional investor. In recent years we have also witnessed the rise of the Shariah-conscious investor, and an attempt by many to gain market share in this emerging segment. Unfortunately, historically the Shariah-conscious investor has been largely ignored by the conventional banking/ financial institution.
The idea of Shariah Compliant investment has only recently come to the forefront in Pakistan for the discerning investor committed to working within the bounds of Islamic prescriptions. There is potentially a huge market here which remains to be tapped through the network of 23 Meezan Bank Limited (MBL) branches that will increase to 30 by the end of this year. The benchmarking criteria for Shariah Compliant mutual funds are not yet fully developed, as there is no Islamic index in Pakistan. It is of interest to note that the Dow Jones Indexes, a leading global index provider recently expanded its Dow Jones Islamic Market Index series by adding the Dow Jones-RHB Islamic Malaysia Index.
The success of Al Meezan Investments and MBL is due to superior performance, product innovation and a strong display of confidence by their clients. Al Meezan Investment's story has been one of innovations to meet the needs of an investor class previously ignored, not only by product innovation alone but by prudent investment management practices designed to optimize results.
Al Meezan Investment's main area of business is investment management; more specifically floating and managing both open ended and closed end funds, and discretionary management of institutional portfolios. Al Meezan Investments launched its first fund, a closed end fund, Al Meezan Mutual Fund (AMMF) in 1996. AMMF has provided a cumulative return of 388.48% since inception in January 1996 till March 31st 2005 versus the 356.20% return provided by the KSE-100 Index during the same period. AMMF has over Rs. 1.6 billion in assets under management as of June 30th, 2005.
Al Meezan Investments launched its first open-ended fund, Meezan Islamic Fund (MIF) in 2003, designed to enable unit holders to participate in a diversified portfolio of Shariah compliant securities. MIF showed an admirable growth of 40% (net of expenses), which is the highest return provided by any Shariah compliant instrument in Pakistan. This brings MIF cumulative return to an impressive figure of 73.18% since inception, and has assets worth Rs. 2,006 billion (as of June 30th, 2005) as compared to Rs. 1,311 million as of June 30, 2004, reflecting an increase of 53.01% in assets under management.
The Board of Directors of Al Meezan Investments announced a bonus dividend of 35% of the year ended June 30, 2005. An investor holding 100 units as of June 30, 2005, will get 29.8075 additional units at the ex-bonus price of Rs. 58.71. The proportionate bonus will apply to actual holding of the unit holders as on June 30, 2005. The net asset value per unit of MIF as of June 30, 2005 was Rs. 76.21 per unit compared to dividend adjusted NAV of Rs. 54.44 as on June 30, 2004.
In keeping with Al Meezan Investment's strong commitment towards meeting the investment needs of the Shariah-conscious investor, Al Meezan Investments launched the first-ever Shariah Compliant balanced fund in Pakistan in December 2004 with a paid-up capital of Rs. 1.2 billion. MBF has an investment objective "to generate long term capital appreciation as well as current income by creating a balanced portfolio that is invested both in high quality equity securities and Islamic Income Instruments". MBF seeks to provide long-term growth in the value of investment which provides consistency to the purchasing power of the investor, and aims to out-perform most other types of investment as has been the case in the funds managed by Al Meezan Investments.
Operations of Al Meezan Investments are conducted under the supervision of MBL, the Shariah Adviser of Al Meezan Investments. The Shariah Supervisory Board of MBL comprises eminent religious scholars and is chaired by Justice (Retd) Muhammad Taqi Usmani. Al Meezan Investments is going to expand its product base and launch other Shariah Compliant investment products in the near future.
With over Rs. 5 billion in total assets under management, Al Meezan Investments, the asset managers of MIF and investment advisors of Al Meezan Mutual Fund Limited and Meezan Balanced Fund, are one of the largest asset management companies in Pakistan and a true success story of prosperity achieved through Shariah Compliant investments.
MOHAMMAD SHOAIB, CFA, CHIEF EXECUTIVE
Chief Executive Officer, Mr. Mohammad Shoaib, heads the management team of Al Meezan Investments. He has been associated with the company since its inception. In fact, he was instrumental in setting up the asset management company. Al Meezan Investments is managing two closed end mutual funds, Al Meezan Mutual Fund Limited and Meezan Balanced Fund and an open-end fund - Meezan Islamic Fund.
He brings to this position extensive experience in fund management business in Pakistan and has an overall experience of 15 years in capital markets of the country. Prior to joining Al Meezan Investments, Mr. Shoaib was Senior Vice President and Head of Department for Capital Markets Division at Pakistan Kuwait Investment Company (Pvt.) Limited.
Mr. Shoaib also has the distinction of being a CFA charter holder from CFA Institute, USA. Chartered Financial Analyst (CFA) charter is internationally recognized for high standards of professionalism in investment management and business ethics. He is the founder and first President of CFA Association of Pakistan (formerly Pakistan Society of Investment Professionals -PSIP). CFAAP is the representative body of CFA charter holders in Pakistan. The CFAAP was set up in Pakistan in May 2002 with 40 members. The number of its members has now increased to 64, most of them being CFA charter holders. Mr. Shoaib has served as President of CFAAP for three consecutive terms.
He has also served as a member of the Asia Pacific Advocacy Committee of CFA Institute, which comprises members of CFA Institute member societies and chapters across Asia Pacific region. The Committee is responsible to review and respond to major new regulatory, legislative, and other developments in the Asia Pacific Region. As a member of APAC, Mr. Shoaib has reviewed and commented on various regulatory initiatives by Hong Kong Stock Exchange, Monetary Authority of Singapore and Asian Securities Analysts Federation.
Mr. Shoaib has also served as a member of the Global Corporate Governance Task Force of CFA Institute which has developed a manual for investors on Corporate Governance of listed companies.
He completed his MBA from Institute of Business Administration, Karachi. He later completed his Diploma in Banking from the Institute of Bankers in Pakistan securing overall second position.
Mr. Shoaib has also served as a non-member nominee director of SECP on the Board of Karachi Stock Exchange for the year 2002. He is also an active member of the Executive Committee of Mutual Funds Association of Pakistan. He has also attended various courses, seminars and workshops on investment management in Asia, Europe, Australia and North America.