INTERVIEW: DR. AMJAD WAHEED CFA CHIEF EXECUTIVE

NATIONAL FULLERTON ASSET MANAGEMENT LTD (NAFA)

AMANULLAH BASHAR
Mar 17 - 23, 2008

Asset Management comparatively is a new segment in the capital regime yet it has grown impressively during last four or five years in Pakistan.

Dr. Amjad Waheed, who holds a doctorate in Investments & Finance from Southern Illinois University, USA and is also a Chartered Financial Analyst while talking to Pakistan & Gulf Economist has expressed his confidence in a firm tone that Mutual Funds having a social and commercial characteristics are bound to flourish at a massive scale in the days to come.

Currently, Dr. Amjad is the CEO of NAFA, which is a joint-venture between National Bank of Pakistan, NIB Bank and Fullerton Fund Management Company of Singapore. Fullerton is owned by Temasek Holdings, which is a US$ 100 billion Investment Company and also owns Singapore Airlines, Singapore Telecom, Singapore Port and Singapore Power, in addition to owing banks in various Asian countries including NIB Bank in Pakistan.

Substantiating his views about stellar growth of the assessment management in Pakistan, observed that the banking system has a strong deposit base in the region of Rs4 trillion yet the depositors are getting a nominal return from the banks especially in the face of rising inflation which makes it a negative return for the depositors. Hence that is an area which offers a great scope for the mutual funds industry in our country.

When asked what the industry is doing to attract the people for investment in Mutual Funds as according to Dr. Amjad so far a major chunk of investment belongs to corporate sector and not from the retailers, he said we have a strong team spread all over the country, they are calling the potential clients every day according to plans to expand the investment base. However, there is a need for creating awareness among the investors which the industry is doing professionally. Dr. Amjad disclosed that his company has a plan to organize road shows especially in the Middle East to attract the potential investors.

He agreed that in the absence of the concept of social and health covers available to the general people, Mutual Funds industry can bridge the gap by launching Education, Marriage and other Funds related to social needs of the society on the pattern of Pension Funds.

Dr. Amjad Waheed presently manages 5 funds, namely NAFA Cash Fund, NAFA Multi-asset Fund, NAFA Stock Fund, NAFA Islamic Income Fund, and NAFA Islamic Multi Asset Fund. Total Assets under management are over Rs.31 billion.

NAFA CASH FUND

Giving the details of various funds managed by NAFA, he said that NAFA Cash Fund (NFC) is an open-end mutual fund with no exposure to the stock market. Objective of NCF is to seek maximum possible preservation of capital and earn a reasonable rate of return via investing in money market and debut securities, CFS and spread transactions.

NAFA STOCK FUND (NSF)

NSF is an open end stock market fund. The objective of NSF is to provide investors with long term capital growth from an actively managed portfolio invested primarily in listed companies in Pakistan.

NAFA MULTI-ASSET FUND (NMF)

NMF is an open end balanced fund. This is a medium risk-medium return fund. Objective of NMF is to provide investors with a combination of capital growth and income.

Dr. Amjad was Head of Equity Mutual Funds & Portfolios at Riyad Bank, Saudi Arabia prior to his association with NAFA. His international exposure to the profession was well indicated from the fact that while in Saudi Arabia, he was managing US$ 7.5 billion invested in 22 mutual funds. Prior to that Dr. Amjad was Head of Investments at NIT, and Chief Operating Officer of FC-ABN AMRO Equities for several years. Before moving back to Pakistan, Dr. Waheed was Assistant Professor of Finance at Tennessee State University, USA and has published several articles in top journals of the world such as Journal of Banking & Finance, Financial Review and Financial Management.

Replying to a question regarding savings and investment trend in Pakistan, Dr. Amjad was of the view that rising inflation has effectively eroded the savings capacity in general while the consumer finance products including credit cards etc have also enhanced accessibility to the cash flows of the people. There is a need to maintain balance between income and expenditures to promote saving habits in the society. On the question of inflation and the way it is being handled by the Central Bank in Pakistan Dr. Amjad said that the State Bank of Pakistan has rightly initiated tightening of monetary policy which an effective way to control inflation. However, the increasing government's borrowing is instrumental in pushing up the inflation and the incoming government should give a serious thought to check borrowing from the banking system which adds fuel to fire in terms of inflationary pressures in the country.

Replying to another question regarding availability of skilled man power in the field of Mutual Funds, he was of the view that so far the business schools have not introduced Mutual Funds as a subject to produce graduates in this specialized field however, Asset Management institutions have their own training program to impart training in this field. He decline to disclose regarding contribution of NAFA towards promotion of this specialized subject he however indicated that something significant was in the pipeline and which he would disclose at an opportune time going forward.