KARACHI, March 31: Certificate holders of all the 13 ICP Mutual Funds Lot B gave their approval of merger at an extraordinary general meeting on Wednesday.

A press release issued by PICIC stated that PICIC acquired management rights of ICP Lot B comprising of 2nd, 5th, 6th, 7th, 9th, 10th, 13th, 14th, 16th, 17th, 18th, 22nd and 24th ICP Mutual Funds on October 24, 2002 when NAV of all the 13 funds was Rs1.55bn. Board of Directors of PICIC decided to merge all the 13 funds into one fund by the name of "PICIC Investment Fund".

Accordingly, requisite procedures advised by Securities and Exchange Commission of Pakistan (SECP) were initiated to achieve merger. The current NAV of all the 13 funds stand over Rs5.5bn.

At the time of acquisition average discount to NAV was 35 per cent which has shrunk to 13 per cent as of March 26, 2004 and is expected to adjust well below 10 per cent after the merger, due to larger capital base, said PICIC.

The merger will provide the benefit of greater float to the fund whereby the comparative trading activity is expected to surge, PICIC said and added that it was observed that funds wherein trading activity is on the higher side, market price is at a lower discount to NAV.

Another clear benefit of the merger is substantial reduction in transaction costs, as all the transactions would be taking place under the umbrella of one fund, PICIC added.

All the 13 funds are in the process of being merged conditional upon completion of legal formalities after which one fund management team will be looking after the risk, return, accounting and administrative concerns, PICIC observed.