KARACHI, July 26: The Employees Old-Age Benefits Institution (EOBI) made a fabulous growth of 189.90 per cent on equity income, realizing Rs1,055.912 million during the fiscal year 2003-04 as compared to Rs364.241 million a year ago , officials said on Monday.

However, the institution's growth in all categories of investments, including government securities, equities and others, stood at 16.88 per cent to Rs12.07 billion compared to Rs10.33 billion recorded last year.

The EOBI has been diversifying its investment schemes for the last three years and has taken up operations in the capital market at a full scale and made remarkable achievements. Increase in income through investment in equities during the fiscal year 2003-04 was Rs1,055.912 million or 189.90 per cent over the last year.

The EOBI during the period under review realized capital gain to the tune of Rs933.393 million, showing an increase of 261.49 per cent over the previous year when it earned Rs258.208 million.

Similarly, dividend income rose to Rs122.171 million or 15.22 per cent as against Rs106.033 last year. A nominal amount of Rs0.348 million was bagged by the EOBI through capital gain on trading of equities, the officials said.

Income through investment in the government securities was higher by 11.61 per cent at Rs10,908.184 million as against Rs9,773.666 million recorded last year (2002-03).

Consequently, the size of total investment fund of the EOBI swelled to Rs80,842.065 million (June 30, 2004) as compared to Rs67,866.267 million recorded at the close of the last fiscal year (June 30, 2003), showing an increase of 41.52 per cent in its investment portfolios.

At the close of the outgoing fiscal, the EOBI's investment in the government securities stood at Rs74,154.396 million as against Rs63,691.707 million the institution had a year ago (June 30, 2003). Investment in other securities stood at Rs2,993.221 million as against Rs2,940.187 million last year.

However, investment in equities increased to Rs3,694.448 million from Rs1,234.373 million last year (June 30,2003). According to the officials, return on investment (un-audited account) for the year 2003-04 was 19.12 per cent and return on equity stood at 44.43 per cent as compared to 41.71 per cent in the preceding year.

The EOBI investment in the government securities reduced from 93.85 per cent to 91.73 per cent in June 2004. Proportion of equity in the portfolio grew from 1.82 per cent to 4.57 per cent, showing an increase of 2.75 per cent.

The EOBI financial performance during the outgoing fiscal year shows that there is a strategic turnaround in the entire operational and financial activities of the institution over the last three years.

Chairman Mohammad Shafi Malik told Dawn that the EOBI for the first time adopted modern techniques in its market operations that enabled it to move along with fast changing investment environments, particularly when there was a shrinking rate of return on government and other conventional saving tools.

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

However, Mr Malik admitted that much of the earning came from realization of capital gains in the first half of the outgoing fiscal because the EOBI unloaded its portfolios in December last year. He said that any share having seven per cent net profit could be picked up because rate of return in other saving tools had came down drastically.