12 May 2004	Wednesday	21 Rabi-ul-Awwal 1425

KARACHI, May 11: The Employees Old-Age Benefits Institution (EOBI) has made an incredible growth of over 358.13 per cent on equity income realizing Rs962.674 million during three quarters (July-March) of current fiscal (2003-04) as compared to Rs210.130 million made in the corresponding period a year ago, official sources said on Tuesday.

The EOBI had been diversifying its investment schemes for the last two years, and took up operations in the capital market at a full scale and made remarkable achievements. Increase in income through investment in equities during July-March period was Rs752.544 million or 358.13 per cent over the corresponding period last year.

The EOBI during period under review enhanced its overall income by 23.51 per cent to Rs8.744 billion as against Rs7.079 billion achieved or earned during the corresponding period last year.

Consequently, the size of total investment fund of the EOBI swelled to Rs77.267 billion as compared to Rs66.289 billion recorded on March 31, 2003, thereby showing an increase of 20.19 per cent.

There is a strategic turnaround in the entire operational and financial activities of the institution over the last two years. A major chunk of the institute's equity income during July-March period came from realization of capital gain, which soared to Rs888 million from Rs162.236 million in the corresponding period last year.

Therefore, there was a rise of 447.36 per cent capital gain realization. After adding a nominal amount of Rs0.246 million to capital gain made out of trading, total capital gain achieved during this period scrambled to Rs888.254 million on March 31, 2004, from Rs162.236 million.

This was a huge rise of Rs726.018 million in total capital gain or 447.355 per cent over the corresponding period last year. Chairman EOBI Mohammad Shafi Malik told Dawn that the EOBI had, for the time being, stopped hunting for new listing of employers so that fresh investment could be allowed to take shape.

Similarly, he said employees registration during this period had risen by 30.33 per cent but the same would also be stopped because only those commercial and industrial units had to be registered who had 10 or more than ten employees.

Giving details about the EOBI's strategy, he said, only those blue chips having 20 per cent profit margin and shares with strong fundamentals are picked up and there was no question of jobbing in the capital market which could risk the principle amount.

However, Mohammed Shafi Malik admitted that much of the earning came from realization of capital gains in the first half of current fiscal because the EOBI unloaded its portfolios in December last. He further said that any share having 7 per cent net profit could be picked up because rate of return in other saving tools have come down drastically.

Being a senior bureaucrat of Income Tax Group, Mr Malik has managed to change EOBI's culture. Besides image building measures, Shafi Malik said different operational steps were also taken to evolve strategy which included employers data base, introduction of self-assessment scheme, rationalizing of EOBI's managerial expenses and training of employees.

For enlarging fund size and securing pensioners' interest, he said investment reforms were introduced by inducting qualified fund manager. On diversification of investments to stocks, services of brokerage houses were taken to ensure profitable operations and only those portfolios were purchased that have healthy financial position and good record of dividend, he said.