KARACHI, Nov 19: Arif Habib Investments is all set to launch a Pakistan capital market fund (PCM) of the initial size of Rs1.5 billion, which would be the largest closed-end mutual fund offering in Pakistan.
In a statement issued here on Wednesday, Arif Habib Investments — the asset management company — stated that the company had been authorized by the Securities and Exchange Commission of Pakistan (SECP) to launch the capital market fund.
Applications had been filed with the Karachi, Lahore and Islamabad stock exchanges for the listing of PCM. The company stated that the proposed fund would include an initial public offering (IPO) of the value of Rs375 million.
“This is the minimum amount that must be offered to the public as their first right of refusal under the listing regulations of the stock exchanges,” the company said, adding the issue had been fully underwritten by prominent business names. The company observed that the IPO was expected to be opened up for public subscription during the first half of December 2003, subject to the receipt of all necessary regulatory approvals.
The company stated that out of the total initial size of Rs1.5 billion worth of the fund, Rs975 million had already been committed for subscription under the pre-IPO arrangements by prominent financial institutions and other investors.
Arif Habib Investment itself was said to be taking up Rs150 million, leaving Rs375 million for the public offer. The company stated that the PCM would be the first fund being structured as a closed-end unit trust scheme under the recently announced NBFC Rules — thus providing investors with the added protection of a trustee.
“The Central Depository Company Limited (CDC), trustee of several other funds, is the trustee of PCM,” the company said. With already about Rs5.5 billion in mutual funds, the launch of PCM would raise the total sum under its management to Rs7 billion, Arif Habib Investments stated.
The PCM would be the second closed-end fund to be managed by Arif Habib Investments, which already manages the Pakistan Premier Fund. The management rights of that fund were acquired late last year. Besides the two closed-end funds, the company also manges three open-end funds: Pakistan Stock Market Fund (PSM); Pakistan Income Fund (PIF); and MetroBank — Pakistan Sovereign Fund (MSF), a strategic alliance with Metropolitan Bank Limited.
The company said that the first full year of performance for the funds managed by Arif Habib Investments had been rewarding for investors. The PSM gave out total return of 81.82 per cent for financial year 2002-03 and a bonus distribution of 40 per cent; the PIF delivered total return of 12.4 per cent and a bonus distribution of 12 per cent, while the Pakistan Premier Fund declared right issue at 50 per cent during financial year 2002-03, a bonus of 12.5 per cent applicable to right shares as well and that followed by interim dividend at 12.5 per cent for the current financial year.
The pre-IPO investors in the PCM were identified as Bank Al Falah, Metropolitan Bank, NBP, PICIC Commercial Bank, Suleiman Ahmed Al- Hoqani (UAE), Bank Al-Habib, The Bank of Khyber, Atlas Investment Bank, Dawood Leasing, Noman Abid & Co, Pak Kuwait Investment Company, PICIC, Prime Commercial Bank, Saudi Pak Commercial Bank, Escorts Investment Bank, Javed Omer Vohra & Co, Security Leasing Corporation, Westbury (Pvt) Limited, Pak Oman Investment Company, First Standard Bank, First Women Bank, PERAC Pension Fund, Saudi Pak Leasing, Shirazi Investments, Crescent Leasing Corporation, EFU General Insurance, EFU Life Assurance, Orix Investment Bank, Pak Venture Capital, Saudi Pak Industrial & Agricultural Investment Company, Yousuf Yaqoob Kolia, Guardian Leasing Modaraba, Motiwala Securities and Arif Habib Securities.
The underwriters for the fund included — Siddiqsons Denim, Ibrahim Agencies, Mian Mohammad Abdullah (Sapphire Group), Dewan Salman Fibre, Metro Securities, Abdul Razzak Tabba (Younus Brothers Group), Bank Al-Habib, NIT, Ferozuddin A. Cassim, Suleiman Ahmed Al-Hoqani (UAE), AKD Securities, Javed Omer Vohra & Co, Muhammad Bashir Jan Mohammad and Haji Ghani Haji Usman.
The company stated that the applications for the initial offer would be entertained by the designated branches of bankers to the issue, which would include — Allied Bank, Bank Al Falah, Bank Al- Habib, the Bank of Khyber, Faysal Bank, First Women Bank, Habib Bank, Metropolitan Bank, MCB, NBP, PICIC Commercial Bank, Saudi Pak Commercial Bank, Soneri Bank, the Bank of Punjab and United Bank.