UAMC renamed as UBL Fund Managers Limited

The United Asset Management Company Limited (UAMC) has been renamed as UBL Fund Managers Limited (UBLFM). The UBLFM is a wholly-owned subsidiary of the United Bank Limited (UBL), which is Pakistan’s second largest private commercial bank.

The UBL was the pioneer in initiating asset management services in the banking sector with the launch of UAMC in 2002 and has thus become a trend-setter.

The UBL Fund Managers Limited has been successfully managing United Money Market Fund (UMF), which is one of the largest open-end money market funds in Pakistan with a size of Rs 3.75 billion.

Investment under CFS stands capped

Total investment under the Continuous Funding System (CFS) on the Karachi Stock Exchange throughout the previous week stood unchanged at the cap level of Rs25 billion, demonstrating that the financing limit of Rs25 billion is small keeping in view the increasing demand.

Analysts said that an idea of more funding may well be had from the fact that the CFS worth about Rs2 billion was billed as outstanding bids.

However, CFS rates at the KSE showed a modest rise at 16.5 per cent from the previous 16.2 per cent a week earlier. They touched the week’s highest at 16.8 per cent briefly.

More financing modes available at bourses

Investors at capital market after reaching the limit under Continuous Funding System (CFS) have more avenues to finance shares to purchase, like in-house badla, futures options and other derivatives, soon to be formulated.

After being effective from August 22, 2005, the CFS in 14 scrips has reached its upper limit of Rs 25 billion.

The response of the market to the announcements made after the meeting of brokers, SECP and Prime Minister, which included launching of CFS, launching of Pre-Trade Verification System and increased tenors for future contracts, was very positive and the KSE-100 index gained 278 points, with trading volumes increasing by 69 percent on day-to-day basis from less than 200 million to over 300 million shares.

More financing modes available at bourses

Investors at capital market after reaching the limit under Continuous Funding System (CFS) have more avenues to finance shares to purchase, like in-house badla, futures options and other derivatives, soon to be formulated.

After being effective from August 22, 2005, the CFS in 14 scrips has reached its upper limit of Rs 25 billion.

The response of the market to the announcements made after the meeting of brokers, SECP and Prime Minister, which included launching of CFS, launching of Pre-Trade Verification System and increased tenors for future contracts, was very positive and the KSE-100 index gained 278 points, with trading volumes increasing by 69 percent on day-to-day basis from less than 200 million to over 300 million shares.

Pre-Trade Verification System at the Stock Exchanges

The pre-trade verification system would be put into place from Monday (Sept 12) at the stock exchanges. That was one of the nine points on which market players and the corporate regulator had inked an agreement in the presence of Prime Minister Shaukat Aziz on August 19.

The system is universally believed to be a step that would strengthen risk management measures, which would eventually contribute to improving the health of the bourses. But the question that boggles many minds is whether the stock exchange has developed or acquired the required technology and software to introduce the system as early as on September 12 and whether all market players have adequate knowledge of how the system would function?

Continuous funding system takes off

The continuous funding system (CFS) took off at the Karachi Stock Exchange on Monday with enthusiastic investor’s response, as the KSE-100 index gained 279 points. According to analysts, the CFS rate on Monday stood at 16.9 per cent with the level of investment at Rs16.3 billion.

KSE Chairman Yasin Lakhani told Dawn that the new system would fulfil the immediate liquidity need of the market and would create stability and restore confidence. He also said that the CFS would eliminate shortcomings in the badla system.

SECP unable to act against stock manipulators, defective laws cited

The Securities and Exchange Commission of Pakistan (SECP) has expressed inability to take action against leading brokers and financial institutions who were involved in the recent (March) stock market crash due to ‘defective’ laws.

The Commission also tabled a fresh list before the National Assembly Standing Committee on Finance containing names of 10 out of 60 brokers/financial institutions responsible for the crash against whom hearing has been completed and judgement would be issued soon.

However, the SECP effort failed to satisfy the standing committee, which constituted a 5-member subcommittee to thoroughly probe the financial scam that jolted the stock market.

Mutual funds can invest abroad

In what is being seen as a landmark decision, the State Bank has allowed mutual funds operating in Pakistan to invest abroad. But initially the central bank has placed a cap of $15 million on such investment by a single mutual fund at a given time, says a circular issued by the Exchange Policy Department of the SBP on Saturday.

“This is a landmark decision,” says Mr. Jahangir Siddiqui who pioneered the open-ended mutual fund in Pakistan. “It is going to discourage capital flight from Pakistan and enable investors to diversify their portfolios geographically for the first time in the country.”

Javed Omer Vohra to quit stock business

Sponsors of the Javed Omer Vohra & Company Limited (JOV & Co.) appears to have decided to quit the stock business, following sale of their controlling stake to Crescent Standard Brokerage and Investment Services Limited. A notice issued on Tuesday by another corporate member of the Lahore Stock Exchange Dosslani’s Securities (Pvt) Limited stated:

“Our clients have entered into an agreement with sponsors of JOV for purchase of 7 million ordinary shares, i.e 35 per cent of the equity stake along with management control of the company.”

It mentioned that the price per share for the transaction was Rs175 per share.

Body to give final shape to mode of stocks financing

The ‘Shaukat Tarin Committee’ will hold a meeting with all stakeholders of stock market on Thursday evening to give a final shape to a new mode of financing, in order to bring back investors to the lack-lustre stock market and improve liquidity.

According to sources, the Committee has improvised the recommendations to be placed with government officials expected to meet in Karachi on Friday, headed by Dr Salman Shah, Advisor to Prime Minister on Economic Affairs, and Omar Ayub Khan, State Minister for Finance.