KARACHI, Aug 17: Chairman of the Arif Habib Financial Services Group (and the sitting chairman of the Karachi Stock Exchange) Arif Habib said that he had noticed great interest of non-residents and institutional investors in the Pakistani capital markets during his visit to Jeddah and Dubai in July.
He was addressing a press conference called by the group on Tuesday to acquaint journalists on the performance of funds under Arif Habib Investment Management Limited (AHIM), which the group said was holding Rs10.5 billion under its management.
Mr Habib also sought to explain the features of the upcoming Pakistan Strategic Allocation Fund (PSAF) - a closed-end fund, which would open up its books for public subscription from August 21 to 24.
One purpose of his visit to Jeddah and Dubai was to launch pre- IPO of PSAF. The PSAF is of the size of Rs3 billion, of which Rs2.250 billion had been subscribed in pre-IPO.
"Among other major institutions and high net worth individuals, the Islamic Development Bank (IDB), Jeddah and the Royal Family of Abu Dhabi also showed keen interest in investing in Pakistan markets", said Arif Habib.
He observed that the interest in Pakistan markets mirrored the image of the country which had greatly improved due to regulatory reforms, high earnings growth of listed companies; risk management measures and improvement in trading environment.
He stated that what was needed now was to attract all that investment through an "effective marketing strategy". Mr Habib claimed that the PSAF would be the first closed-end fund wherein Provident Funds would be allowed to take stakes.
He added that it would be possible after the compliance with the rule of securing rating of the fund, which he said was expected to be received on Wednesday. Provident Funds are already allowed by law to invest in open-end funds.
With 75 per cent of the Rs3 billion already allocated in pre-IPO, the remaining Rs750 million or 25 per cent worth of certificates in PSAF, as required by law, have been offered to the public. "For the first time in Pakistan 20 per cent of the IPO has been reserved for Non-resident Pakistanis", said Mr Habib.
Nasim Beg, chief executive of Arif Habib Investments, latter explained that August 21 and 22 being Saturday and Sunday had also been included in the subscription dates to accommodate non- residents. The general public have been offered certificates worth Rs562.5 million.
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; Mohammad Rashid Ashraf and Family and Suleiman Ahmed Al Hoqani. "The IPO has been fully and firmly underwritten by institutions of high standard and repute", a press release issued by the group noted.
Mr Habib explained that his group had progressed noticeably in the last few years. "The current decade has already witnessed listing of Arif Habib Securities, launching of Arif Habib Investments and its (soon to be) six funds and now an agreement to acquire majority stakes in the Pakistani operation of Rupali Bank of Bangladesh", he said and added that the group was soon expected to restructure and bring all the companies under the umbrella of Arif Habib Securities, a holding company.
Mr Beg, founder chief executive of Arif Habib Securities, recounted the performance of all funds under its management. Regarding the PSAF, he said that the fund would focus on capitalizing on price volatility in the stock market.
"This volatility may be sentiment driven or a result of the time the market takes to adjust to a change in fundamentals", he said and added that the investment decisions of the contrarian fund would be based on a mix of professional expertise and quantitative discipline.