14 August 2004	Saturday	27 Jamadi-us-Saani 1425

KARACHI, Aug 13: Pakistan Strategic Allocation Fund (PSAF) - a closed-end Scheme of the Arif Habib group - is set to hit the stock markets on August 21 to 24. The total issue is worth the sum of a staggering Rs3 billion.

Officials at the Arif Habib Investment Management Limited (AHIM), who are the investment adviser to the Scheme were scarcely worried over whether or not the giant of an issue would be fully subscribed. The reason possibly was that the Group already held in its hand three-quarters of the Rs3 billion worth of certificates on offer.

"We have already managed to safely secure Rs1.913 billion in pre-IPO and another Rs337.5 million has been made or arranged by the Investment Adviser," a senior official of the group said on Friday. That takes care of Rs2.250 billion.

For the remaining Rs750 million or 25 per cent worth of certificates in Pakistan Strategic Allocation Fund (name being somewhat of a tongue twister!), subscription list would open up for four days (August 21 to 24).

The general public have been offered certificates worth Rs562.5m only for the remaining Rs150 million is the mandatory offer to non-resident Pakistanis and Rs37.5 million to employees.

The Group is confident that the public issue would be heavily oversubscribed. "The timing is perfect and the nature of the Fund would attract public interest," said the company official.

The issue is fully underwritten by 19 parties including banks, brokerages and corporates. The company officials also refer to other funds managed by the AHIM, which they claim had posted impressive performance.

They included open-end funds: Pakistan Stock Market Fund; Pakistan Income Fund; Metro-Bank Pakistan Sovereign Fund. Closed-end funds included Pakistan Premier Fund Limited (formerly KASB Premier Fund Limited) and the Pakistan Capital Market Fund.

Inclusive of the IPO of PSAF, the funds under management of AHIM would exceed Rs10.5 billion. The figure of subscribers to pre-IPO exceed 103, including some half a dozen international investors: Magenta International Limited; First National Company of Oman; Arab Emirates Investment Bank; Mr Mohammad Rashid Ashraf and Family and Mr Suleiman Ahmed Al Hoqani - the last picking up pre-IPO worth Rs100 million.

It has been provided in the offering documents to be released on August 14, that the Pre-IPO investors would hold at least 15 per cent of their investment (Rs337.5m) for a minimum period of two years.

The Pakistan Strategic Allocation Fund is proposed to be a mix of equity and money market investments. In deciding where and when to invest, the Fund strategists propose to combine human judgment with market fundamentals.

The objectives have been set as to capitalize on deviation of market prices from fair values. There is an elaborate investment strategy, but broadly, 35 per cent of assets are proposed to be allocated in money market if the market is fairly priced and 65 per cent asset allocation would be in equities.

"Equities have delivered 18pc per annum over last 24 years and with expected higher earnings growth of 8-10 per cent for FY05, the total return from stock market over the next one to two years may be higher than the historical average," suggested an Investment Actuary, who ran a slide show for the scribe, at the Funds offices on Friday.

Meanwhile, in a notice issued on Friday, the Karachi Stock Exchange announced that provisional listing of Pakistan Strategic Allocation Fund would take place from Monday, August 16 and the Fund is proposed to be formally listed w.e.f Monday October 4, 2004.