AL-MEEZAN: THE BIGGEST ISLAMIC FUND MANAGER
ASSETS UNDER MANAGEMENT EXCEED RS. 18 BILLION MARK
SHABBIR H KAZMI
Mar 17 - 23, 2008
According to various estimates the size of Islamic finance industry is estimated around US$ 500 billion in terms of assets, and the market has been growing at about 10% a year for the last ten years. There are more than 300 Islamic finance institutions in 75 countries around the world providing not just commercial banking services but also funds managements etc. At present more than 500 Shariah-compliant funds operating globally.
Eight asset management companies are offering Islamic funds in Pakistan with total assets under management exceeding Rs 23 billion as on 31st December 2007. Other asset management companies are also in the process of launching Shariah compliant mutual funds.
Market share of Shariah complaint mutual funds currently stands over 6.5 per cent in Pakistan, which is expected to increase to almost 10 per cent by 2010.
The history of Islamic mutual funds in Pakistan may be brief but the progress achieved is outstanding, when compared to the progress achieved in other countries.
The enviable growth of the Islamic financial system can be attributed to the proactive approach of the regulators and a lot of effort being done by the players. Achieving one after another milestones would have not been possible without the dedicated due diligence by the fraternity of Shariah scholars.
Among the eight Islamic asset management companies, Al Meezan Investments has the largest asst base. The total assets under management of Al Meezan Investments have increased to Rs. 16.69 billion as on December 31, 2007 from Rs. 12.16 billion as on June 30, 2007, showing a good growth of 37%. Currently the assets under management stand at Rs. 18 billion. With AM2 Management Quality Rating and 5-Star ranking for all eligible funds, the company clearly stays well ahead of all its competitors in the Islamic asset management market in the country. The Shariah advisory board includes eminent scholars from Pakistan, Saudi Arabia and Bahrain and operates under the supervision of Honorable Justice (Retd.) Mufti Muhammad Taqi Usmani.
Meezan Islamic Fund (MIF) is Pakistan's largest open end equity fund in the private sector. During the half year period ended December 31, 2007, MIF earned net income of Rs. 471.9 million as compared to Rs. 193.9 million in the corresponding period last year reflecting an impressive growth of 143.3%. The total net earning translates into Rs. 10.92 per unit. The net assets of MIF as on December 31, 2007 stood at Rs. 4,613 million (Rs. 63.02 per unit) as compared to Rs. 3,679 million as at June 30, 2007, reflecting an increase of 25.39%. At present, the net assets of Meezan Islamic Fund have crossed Rs.5,200 million.
Meezan Islamic Income Fund (MIIF) is Pakistan's first and the largest Shariah compliant open ended income fund. During the half year ended December 31, 2007, MIIF earned a net income of Rs. 285.1 million (2.20 per unit). The net assets of MIIF as on December 31, 2007 stood at Rs. 6,777 million (Rs. 52.21 per unit) as compared to Rs. 3,162 million as at June 30, 2007, reflecting an increase of 114.33%. Total annualized tax free return of MIIF till December 31, 2007 was 9.4%. At present, the fund size is Rs. 7,414 million.
Meezan Tahaffuz Pension Fund (MTPF) is Pakistan's first and the largest Shariah compliant pension fund scheme. It was launched in June 2007. MTPF consists of three sub-funds. During the half year period ended December 31, 2007, equity sub-fund earned net profit of Rs. 4.69 million. While the net profits in Debt sub-fund and Money Market sub fund were Rs. 2.23 million and Rs. 2.06 million respectively. At the close of half year total net assets in all three sub-funds of MTPF stood at Rs. 168.32 million.
Al Meezan Mutual Fund (AMMF), a close ended equity fund, has been in operation since 1996. During the half year period ended December 31, 2007, AMMF earned a net income of Rs. 129.4 million (Rs. 0.94 per share) as compared to Rs. 45 million (Rs. 0.33 per share) in the corresponding period last year reflecting an impressive growth of 187%. As on December 31, 2007, AMMF's net assets stood at Rs. 2,041 million.
Meezan Balanced Fund (MBF), a closed end balanced fund scheme, during the half year period ended December 31, 2007, earned net income of Rs. 62.7 million (Rs. 0.52 per unit) as compared to Rs. 55.4 million in the same period last year. The income was mainly generated through realized capital gains of Rs. 45.6 million, dividend income of Rs. 20.6 million and profit on Shariah compliant income instruments of Rs. 33.1 million. The net assets of MBF as on December 31, 2007 stood at Rs.1, 467 million (Rs. 12.24 per unit).
In line with the philosophy of developing Shariah compliant products to meet the investors" needs, Al Meezan Investments is going to launch next month Pakistan's first Shariah Compliant Capital Protected Fund ñ Meezan Capital Protected Fund that will provide investment opportunity to the investors who desire high level of capital protection and also want to get healthy return from positive stock market development.
Islamic banks, modarabas, Islamic mutual funds and takaful operating companies are jelling to achieve greater synergy as well as strengthening individual players.
The beauty of Islamic financial system is that due to inherent advantages, its growth trajectory is remarkable even in the non-Muslim countries.
The collective efforts of all the Muslim countries are helping in achieving quantum leaps and countries are learning a lot from each others' experience. There is enormous growth potential, which cannot be tapped without creating awareness about the benefits of Islamic financial system.