KARACHI, Sept 22: Pakistan Industrial Credit and Investment Corporation (PICIC) proposes to establish an insurance company that would offer general insurance services.

The board of directors of PICIC, which met on Friday, approved the formation of insurance company, which the company said in a press statement, was aimed at catering all financial needs of customers under one roof.

PICIC already owns a commercial bank and had recently expressed intention to launch into consumer financing. The PICIC board also declared right issues for all the 13 ICP funds under PICIC management. The 13 ICP funds constitute Lot ‘B’ and comprise 2nd; 5th; 6th; 7th; 9th; 10th; 13th; 14th; 16th; 17th; 18th; 22nd and 24th Mutual Funds.

For the first 11 ICP Mutual Funds, the corporation declared 150 per cent right issue (i.e 150 certificates for every 100 certificates held) and for 22nd and 24th, the rate of right issue was 100 per cent (i.e 100 certificates for every 100 certificates held). The right issue in respect of all mutual funds was said to be on premium, except for 24th, which was at par.

The offered price (par plus premium) per certificate for 2nd ICP Mutual Fund was Rs15; 5th was Rs15; 6th was Rs30; 7th was Rs15; 9th was Rs25; 10th was Rs20; 13th was Rs40; 14th was Rs15; 16th was Rs12.50; 17th was Rs15; 18th was Rs15; 22nd was Rs12.50 and 24th was Rs10.

“The market prices of all the funds offering right is substantially higher as compared to their right offered prices and would help enhance the certificate holder value,” the corporation said and added that the aggregate NAV of ICP-Lot ‘B’ when acquired by PICIC in December 2002 was Rs1,550 million, which had increased by 275 per cent to Rs5,818 million after the right issue.

PICIC stated that the objective of the right issue was to supplement more flexibility to the fund manager to take advantage of the market opportunities. It said that the corporation intended to utilize substantial portion of the proceeds from the right issue by investing in stocks and rest in fixed income securities. “This approach is expected to provide a partial hedge to the fund against any adverse fluctuation in the stock market,” the press release said.