Issuance, redemption of open-end funds: majority of fund managers decides to continue suspension

Majority of the mutual fund managers have decided to continue suspension of pricing, issuance and redemption of all their open-end funds and collective investment schemes having direct exposure in the equity market till further notice.
According to the fund managers, the decision was taken in light of exceptional circumstances currently prevailing in the stock market leading to difficulty in proper price discovery and to safeguard the interest of their unit holders. They said that the price floor at Karachi Stock Exchange has been removed from December 15, 2008, however, due to circuit breaker of 5 percent, there is virtually no trading in most of the stocks as there are no buyers at prevailing prices.
The issuance and redemption of the said funds was suspended some three and a half months back when the floor was imposed on share prices from August 28, 2008. It was announced that the suspension would be removed after three days of removal of the floor, however, the fund managers decided to continue with the suspension for more few days.
National Investment Trust (NIT), having major share of Rs 64 billion in the total Rs 100 billion open-end fund industry, said that keeping in view the prevailing situation in the stock market and the best interest of the unit holders, it has been decided to continue with the suspension of pricing and dealing in NIT units for the time being. "Normal dealing in NIT units will resume as soon as normalcy returns in the market with consequential effect on price discovery," it said.
National Fullerton Asset Management Limited also decided to continue with the suspension of issuance and redemption of units in the NAFA Stock Fund, NAFA Multi Asset Fund and NAFA Islamic Multi Asset Fund till further notice.
The UBL Fund Managers also announced to continue with suspension of issuance and redemption. They believed that the suspension would be lifted in next few days as and when there are adequate trading volumes at Karachi Stock Exchange (KSE) leading to proper price discovery in valuation of equity securities," the management of UBL Fund Managers said.
Arif Habib Investment Management Limited also announced to continue with suspension in dealing of units of Pakistan Stock Market Fund, Pakistan Capital Market Fund and Pakistan International Element Islamic Fund till further notice. Al Meezan Investment Management Limited also decided to continue suspension of issuance and redemption of the units of Meezan Islamic Fund till further notice.
AMZ Asset Management also announced a temporary suspension of issuance and redemption of units of AMZ Plus Stock Fund till further notice. AKD Investment Management Limited informed the unit holders of AKD Opportunity Fund and AKD Index Tracker Fund that due to persistent inadequate trading volumes and lack of price discovery in the equity market the suspension in dealing of units of the above mentioned open and collective investment schemes having direct exposure in the equity market will continue till further notice.
AlFalah GHP Investment Management Limited also decided to continue suspension of issuance and redemption of units of Alfalah GHP Value Fund, Alfalah AGP Islamic Fund, Alfalah AGP Principal Protected Fund and Alfalah AGP Alpha Fund.
Dawood Capital Management Limited announced to continue the suspension in dealing of units of Dawood Islamic Fund having direct exposure in the equity market. Faysal Asset Management Limited said that redemption and issuance of units of Faysal Income and Growth Fund and Faysal Savings Growth Fund will remain suspended until further notice. Crosby Asset Management (Pakistan) Limited has also took the same decision to continue the suspension of the Crosby Dragon Fund till further notice. However, some mutual funds managers have decided to start pricing, issuance and redemption of their funds from Thursday.