950807

ICP planning to enter

corporate brokerage,

leasing business

AZMATULLAH

ISLAMABAD: The Investment Corporation of Pakistan (ICP) is planning to go for corporate brokerage and leasing.

The initiative is the part of the Corporation's expansions plans, said Asadullah Khawaja, Managing Director of the ICP.

Talking to Business Recorder on Monday he said that the ICP will do brokerage and leasing business, possibly in joint venture. "All the spadework is expected to be completed by the end of this year," he added.

Khawaja, who is an a short visit to deliver presentation on the ICP's latest 25th Mutual Fund, outlined the corporation's performance.

He said despite odds and resource constraints, the ICP has done pretty well. In Mutual Funds, the ICP has the paid-up capital of over Rs 1.5 billion with market capitalisation of Rs 3.3 billion and the value of portfolio being above Rs 7.4 billion.

He said: "Our Mutual Funds have hitherto been oversubscribed and have never been underwritten, which reflects the confidence of investors." The average rate of dividends on ICP Mutual Funds has been 40 percent.

Khawaja said that for the 25th Mutual Fund of Rs 400 million, "we have lined-up almost all the requisite investment. The new Mutual Fund carries the advantage of bonus and right issues in addition to cash dividends."

This time, he said, limited companies, corporate bodies, trusts, benevolent funds and co-operative societies have also been permitted to subscribe to the Fund.

He said the Fund is being established with a view to provide investment incentive and opportunity and generally to help in broadening the base of investment in Pakistan. The Fund seeks to minimies investment risk by diversification of investment and expert management. The modus operandi will be to invest in ordinary stocks, and other non-interest bearing securities promising capital appreciation and periodical returns.

The Fund portfolio and the management of its resources will be handled in such a manner that neither the investments of the Fund nor its cash requirements/resources contain any element of interest in their operations.

The Corporation has a history of floating and managing close-end mutual funds, giving attractive returns to certificate holders in the shape of dividends. ICP Mutual Funds are considered to be the best in this regard.

He said the Corporation over the years has built up a sizeable investment portfolio which comprises shares acquired through underwriting take-ups and shares purchased from the stock market.

It is worth mentioning that the income from dividends and capital gains through the investment portfolio increased remarkably from Rs 285.8 million in 1992-93 to Rs 584.2 million and constituted around 63.5 percent of total income during the year 1993-94.

THe total holdings in the investment portfolio increased by 70 percent from Rs 1,103.5 million on June 30, 1993 to Rs 1,876.0 million on June 30, 1994.

The major holdings in the portfolio were in mutual funds, banks, financial institutions, federal investment bonds, shares of cotton textiles, fuel & energy and chemicals and pharmaceutical sectors which together accounted for over 75 percent of the total investments on June 30, 1994.

The purchases and sales of shares for ICP investment portfolio and on behalf of investment account holders have been instrumental in providing strength to the stock market whenever needed. However, as the Karachi Stock Exchange has witnessed unprecedented increase in trading activity in recent years, which continued during the year 1993-94, ICP's transactions on the market remained around four percent of the total turnover on the Karachi Stock Exchange as against six percent in the preceding year.