ISLAMABAD, July 21: The board of directors of Saudi Pak Industrial and Agricultural Investment Company has approved the setting up of “Saudi Pak Asset Management Company” with initial paid-up capital of Rs250 million.

Informed sources said that the regulatory approval of the State Bank of Pakistan and Securities and Exchange Commission of Pakistan (SECP) would be sought soon to establish the company.

The asset management company will float mutual funds to attract investment from overseas Pakistanis. There will be an option for the people to go into income fund or equity fund. “There is a higher risk and a higher return in the equity fund,” a source explained.

It was also learnt that the Saudi Pak company, which is 50:50 investment by Saudi Arabia and Pakistan, earned Rs6.4 billion profit in the first quarter of 2008 that helped it to offer 150 per cent dividends to its shareholders.

The company’s operations were consistently growing as it approved a financing of Rs5.4 billion in the first six month of 2008 against Rs3.3 billion over the corresponding period last year.

From January to June 2008, most of the Saudi Pak lending went into power generation, oil and gas and fertiliser sectors which had economic significance. The recoveries of the company remained normal despite the country’s overall disturbing economic conditions.

Sources also said that the capital of the Saudi Pak Real Estate Company had been increased from Rs100 million to Rs250 million so as to expand its operations. The company was relatively new which was established in 2007.

Similarly, the paid-up capital of Saudi Pak Insurance Company had been enhanced from Rs250 million to Rs375 million.