BETTER FUND MANAGEMENT ATTRACTING INVESTMENT IN PAKISTAN
CDC road shows producing results
July 09 - 15, 2007
While the capital market was performing at its peak on one hand, Fund Management is also making the horizon bright as the industry has touched the level of Rs50 billion. The impressive results and attractive dividend offered by the fund managers also luring foreign investment to the tune of $ one billion both in stocks as well as in mutual funds in Pakistan.
In a way, credit goes to Central Depository Company of Pakistan(CDC), which is silently doing a nice job of attracting investment by holding road shows within, and outside country creating awareness among the potential investors in the capital market which is paying the highest rate of return in the region.
Ejaz Ali Shah, Head of Marketing & Customer Support Services of CDC told Pakistan and Gulf Economist that CDC has come a long way on its road to progress since it became operational and has proved itself as adherent of good corporate governance ensuring efficiency and transparency in settlement mechanisms and reinstating investors' confidence in the market.
Transcending its core depository function, which is to operate and maintain its central depository system, CDC has embarked on a journey of investor awareness, keeping up the spirit of market development sown in the very foundations of the company. Responding to the long-felt need for investors awareness, CDC has taken up a leading role in promoting Capital Market investment in Pakistan over time.
CDC is educating the existing and potential investors through a series of Investment Road Shows about the capital market in order to broaden the country's investor's base. These road shows aim at clearing misconceptions about investment in capital market and promoting safe and secure investment opportunities, in view of its responsibility in promoting a healthy investment culture as a key pillar in the capital market infrastructure. In this regard, CDC has successfully held road shows in distant cities like Sialkot, Preshawar, Hyderabad, Quetta, Multan and Sukkur so far.
CDC held road shows across national boarders to Dubai and Abu Dhabi last September. This initiative no doubt will provided a platform to project the image of flourishing Pakistani Capital market in front of UAE based fund managers, bankers and Pakistani expatriates.
Ejaz said that currently the CDC in the same spirit was taking the series of investment Road Shows in London and New York next week. These road shows aimed at facilitating face-to-face dialogue between corporate entities and fund managers/institutional investors who are interested to invest in Pakistan. The drive is expected to result in foreign fund manners obtaining insight to the Pakistan Capital market and encouraging them to further invest in lucrative Pakistani securities.
Ejaz while commenting the positive approach and policies of the present government reflected in the momentum of growth said that this historic boom might not afford any change of policy and political uncertainty in the wake of forthcoming elections in the country. Hence there is a need of continuity in policies, which led the capital market to gain unprecedented growth in Pakistan.
Following are the highlights of the impressive performance by some of the leading fund managers in Pakistan.
ARIF HABIB SPARKS WITH IMPRESSIVE DISTRIBUTION
Arif Habib Investments (AHIM) with funds under management of Rs22.6 billion as of June 30, 2007 has announced the following distribution for their open-end funds: Pakistan Stock Market Fund, Pakistan International Element Islamic Fund, Pakistan Capital Market Fund, Pakistan Income Fund and MetroBank Pakistan Sovereign Fund.
The Pakistan Stock Market (PSM) Fund's Net Asset Value per unit has grown from Rs84.29 to Rs109.08 over the financial year 2007, a total return of 29.41 percent, Net Asset as of June 30, 2007 are Rs3.25 billion. PSM has announced a bonus distribution of Rs25 per unit which is 29,66 percent of the opening Net Asset Value for financial year 2007.
Pakistan Capital Market Fund (PCM) Net Asset Value per unit has grown from Rs11.53 to Rs47.73 to Rs58.89 over the financial year 2007, a total return of 23.38 percent, Net assets as of June 30, 2007 are Rs1.08 billion. PCM has announced a bonus distribution of Rs3 per unit, which is 26.02 percent of the opening Net Asset Value for 2007.
The Pakistan International Element Islamic Fund's (PIIF) Net Asset Value per unit has grown from Rs47.73 to Rs58.89 over the financial year 2007, a total return of 23.38 percent. Net assets as of June 30, 2007 are Rs1.07 billion. PIIF has announced a bonus distribution of Rs8.75 per unit which is 18.35 per of the opening net asset value for 2007.
The Pakistan Income Fund (PIF) net Asset Value per unit has grown from Rs50.11 to Rs55.47 over the financial year 2007, an annualized return of 10.70 percent. Net assets as of June 30, 2007 are Rs9.41 billion. PIF announced a bonus distribution of s5.25 per unit, which is 10.48 percent of the opening Net Asset Value for 2007.
A total return for the MetroBank Pakistan Sovereign Fund series was 8.60 percent for MSF (12/12), 8.67 percent for (MSF 12/07) and 9.06 percent for MSF(perpetual). The bonus distribution for MSF series is Rs2.63 per unit for MSF (12/12), Rs3.97 per unit for MSF (12/7 and Rs1.79 per unit for MSF (perpetual) which is 5.10 percent, 7.93 percent and 3.99 percent respectively on the basis of the Net Asset Value at the beginning of the financial year.
NIT BREAKS ITS ALL PREVIOUS RECORDS OF DIVIDENDS
NIT has once again broke its all previous records and declared the ever highest dividend of Rs 6.20 per unit for its unit holders for the year ended on June 30, 2007. Thus NIT has again set a new history of excellent performance. The payment of record dividend @ Rs 6.20 per unit would involve a huge total payout of Rs. 10 billion among its unit holders as against Rs. 8.66 billion paid to unit holders last year. It may be mentioned here that the graph of dividend payout by NIUT has shown a consistent upward trend during the last five years touching the peak of Rs. 6.20 per unit for the year ended June 30, 2007 which is 6.9 % higher than Rs. 5.80 (previous highest) announced by the Trust in FY06. This was stated by Chairman & MD ó NIT in a press release issued on July 04, 2007 after the Board of Directors of National Investment Trust Limited approved the annual accounts for the year ended 30th June 2007.
NIT has consistently been able to provide superior return to its unit holders where its Net Asset Value increased from Rs. 43.07 (Ex Dividend) as of 30th June 2006 to Rs. 62.38 as of June 30, 2007. (including a dividend yield of 14.4% on NAV at the beginning of the year) which reflects a total return of 44.83% for the year ended 2006-07. Thus NIT has once more been able to outperform the benchmark KSE -100 Index by 6.96%.
The Trust earned Net Income of Rs. 19,813 million which is the highest ever net income earned by the Trust in its entire life. Net Income of the Trust depicts a growth of 114-52% increasing to Rs. 19,813 million in FY07 from Rs. 9,236 million in FY06. This translates into the record earning per unit of Rs. 12.24 in-FY07 as compared to the earning per unit of Rs. 6.19 earned by the Trust in FY06. Thus earning per unit for the FY07 surpassed' the last year's highest ever earning per unit mark by 97.74%.
The Chairman stated that the Trust has realized all time high capital gains of Rs 16.818 billion in FY07 as compared to Rs. 6.805 billion recorded last year which shows a tremendous growth of 147% in capital gains of the Trust. This huge capital gains realized by the Trust is mainly attributable to the block sale of NIT's holding in Lakson Tobacco, PICIC, Prime Bank Ltd etc.; gains through rightsizing of portfolio, as well as gains realized through normal trading activities. The gains realized through rightsizing of HFT & AFS Portfolios stood at Rs. 11.07 billion.
It is pertinent to mention here that NIT has always been following the consistent policy to generate activity in the Stock Market with a view to support the market through its operations, enhance the confidence of investors, work only on delivery based purchases and not to sell in falling market. This policy has always yielded good results for the Trust.
He further mentioned that the dividend income earned by the Trust on its. portfolio for the year ended June 30, 2007 stood at Rs. 3.08 billion.
The sale of NIT units (including CIPs) during the year ended on June 30, 2007 stood at Rs. 14.74 billion as against the sale of NIT units worth Rs. 5.04 billion in previous year, which depicts a huge increase of 192.5% in sale of units over previous year. NIT units worth Rs. 8.62 billion were redeemed during the year under review as against the units worth Rs. 10.58 billion redeemed in last year. This- shows the growing confidence of investors on NIT.
Value of Net assets of NIT is another landmark in Mutual Fund Industry. Net Assets of, the Fund have depicted huge growth of 57% by increasing from Rs. 64.296 billion as on June 30, 2006 to Rs. 100.963 billion as on June 30, 2007.
The chairman & MD ó NIT informed that as of April 01, 2007 the fund has been split into two parts representing LOC & Non-LOC Holders and now NITL being the Management Company is managing two separate funds.
Mr. Tariq Iqbal Khan — Chairman & MD, NIT said that the consistent extraordinary performance of the Fund is attributable to proactive & dynamic guidelines set by the Board of Directors of NIT and timely & precise execution of such policies by the professional management of the Trust.