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SBP and SECP to review Abamco's Islamic mutual fund proposal

KARACHI (January 11 2003) : The State Bank of Pakistan (SBP) and Securities and Exchange of Exchange of Pakistan (SECP) have said that they will review carefully Abamco's proposed Islamic mutual fund, and laws pertaining to pension and provident fund.

Dr Ishrat Hussain, Governor, State Bank of Pakistan, and Khalid A Mirza, Chairman, Securities and Exchange Commission of Pakistan (SECP) along with Shahid Ghaffar, Commissioner, Securities Market (SECP), Hayat Jasra, Executive Director, Legal (SECP), and Ms Saadia Khan, Executive Director, Specialised Companies (SECP), on Friday visited Abamco, Pakistan's first and the largest asset management company in the private sector. Jahangir Siddiqui, founder of Abamco Limited was also present.

Ali Siddiqui, Executive Director, Abamco, made a presentation on the performance of the Company since 1995, when the company was established.

Abamco is at present managing three open-ended mutual funds.

Unit Trust of Pakistan, Abamco's flag ship fund, was launched on October 27, 1997, with seed capital of Rs 325 million, and has a fund size in excess of Rs 1.3 billion. The par value of units is Rs 5,000.

The Fund has shown annualised return of 19.5 percent since its launch.

UTP has been assigned AA(F) rating by Pacra.

UTP Income Fund, Abamco's second open-ended mutual fund, was launched on August 26, 2002, with seed capital of Rs 50 million and has a fund size of Rs 190 million and has shown a return of 14.25 percent on an annualised basis since launch.

The par value of units is Rs 500. This fund invests in debt instruments.

Abamco's third open-ended fund, the UTP Islamic Fund, is Pakistan's first Shariah-compliant fund.

This fund was launched on December 27, 2002, with seed capital of Rs 60 million.

It has been very well received in the market and, during the initial period up to January 4, 2003, received an additional subscription of approximately Rs 200 million from the public.

The subscribers include individuals, provident/ pension funds and welfare and charitable organisations.

The par value of units is Rs 500. The net asset value of units has improved to Rs 509 on January 10, 2003.

Abamco is also managing 13 closed-end mutual funds.

BSJS Balanced Fund Limited, Abamco's first closed-end fund, was launched in January 1996 with a capital of Rs 150 million.

The present net assets are Rs 540 million. This fund has shown an annualised return of about 20 percent.

The fund has been assigned AA(F) rating by Pacra. Abamco acquired management rights of 12 ICP mutual funds grouped as Lot 'A' in October, 2002.

It is proposed to merge the 12 funds as a closed-end trust.

Total funds under management of Abamco are valued at Rs 4.4 billion.

Habib-ur-Rahman, Chairman and Chief Executive of Abamco, gave a briefing on the regulatory issues, relating to mutual funds.

He appreciated the measures taken by SECP on the capital market reforms, which include the mutual funds as well.

This was a Herculean tasks and only due to untiring efforts of the Chairman of SECP and his team this was possible.

He hoped that in years ahead these reforms would be consolidated.

He said that the pension and provident fund reforms are essential for the development of capital market.

These should be brought under the regulation of SECP.

He hoped to meet the requirement of Islamic Fund and that the Government will encourage the TFCs on profit and loss sharing basis.

Both the Governor of State Bank and Chairman of SECP applauded the pioneering role played by Abamco in the development of mutual funds in Pakistan.

They assured the company that suggestions made by it would be carefully reviewed.

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