Representatives of Arif Habib Investments made a presentation at Lahore Stock Exchange (LSE) on Monday on Pakistan Strategic Allocation Fund (PSAF) being offered to public from August 21 to 24, 2004. The IPO will be available at Rs 10 per unit/certificate.
Members, brokers and investors of LSE attended the presentation. LSE Managing Director Hamid Imtiazi was also present.
Vice-president Arif Habib Investments Basharat Ullah said that the main objective of the fund is to capitalise on deviation of market prices from fair value.
He informed the participants that the total size of the fund stood at Rs 3 billion, of which Rs 2.250 billion had already been subscribed by over 100 leading banks, DFIs and individuals in pre-IPO.
Now the remaining chunk of Rs 750 million is being offered to public, of which 20 percent is reserved for non-resident Pakistanis and 5 percent for employees of Arif Habib Group of Companies.
About investment methodology, he said that this fund, which is managed by Arif Habib Investments, is a mix of stock market and money with 65 percent asset allocation in equities and 35 percent in money market.
Likewise, a maximum of 7.5 percent of the Fund size is in top 5 liquid stocks and 2.5 percent in top 5 least liquid stocks, he added.
Giving detailed overview of PSAF, its objectives, investment policy, quantitative model, and likely benefits, he said it would target to benefit from market volatility on two counts ie time lag in market catching up with fundamental changes and sentiment-driven price volatility.
PSAF will be dependent on professional experts as well as a quantitative discipline for its investment decision making.
He said that this is the second closed-end fund launched by Arif Habib Investments this year. Earlier this year Pakistan Capital Market (PCM) Fund was launched in an offer heavily oversubscribed by 5.5 times, he claimed.
PCM was over subscribed in each category. Including PSAF and PCM, Arif Habib Investments are fund managers for three closed-end and three open-end funds.
Earlier in his introductory remarks LSE MD Hamid Imtiazi said that IPOs of mutual funds was a very healthy sign for the capital market and it will raise the liquidity position of the market.
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