Launch of FBGF - Shaukat for specialized products: Mutual funds sector
KARACHI, April 17, 2004: The Federal Finance Minister Shaukat Aziz has urged the fund managers to develop specialized products that cater to the needs of different type of investors ranging from the ultra conservative to risk seekers.
Speaking at the launching of first open ended mutual fund of Faysal Growth Fund on Saturday the finance minister urged the fund managers to explore the retirement saving markets where the potential for growth in assets of mutual funds is enormous.
He was of the view that government sponsored schemes like National Savings Scheme had outlived their utility and were now a burden on the national exchequer. "It is, therefore, the responsibility of the mutual funds sector to introduce schemes for retirement, planning, pension funds and provide market-based effective returns to this class of savers," the minister stressed.
The finance minister informed the gathering of bankers, investors and businessmen that the Securities and Exchange Commission of Pakistan (SECP) is finalizing a pension scheme for the private sector in light of the observations of a mission that went to study Kazakhstan's pension fund scheme.
Kazakhstan, he pointed out has shown interest in Pakistan's capital market and would be sending a team to study the potential of Pakistan's stock exchanges.
Finance ministry, he said, had created an office of actuary to look at the pension in the public sector. Shaukat Aziz advised the mutual fund industry managers to closely liaise with these two institutions.
He reminded the audience that insurance industry had already been allowed to offer retirement annuities and certain tax relief had also been offered to the participants of such annuities. The mutual fund industry, the minister said has traditionally focussed on the financial assets. "It should now come forward and create real assets in the economy by setting up specific and time-bound self-liquidating funds in the housing sector," he urged.
The finance minister lauded that banks were now involved in the housing finance. But he found banks' focus more on the high income customers and there is a need to address the requirements of the lower and middle income clientele.
Shaukat Aziz gave a brief resume of the development of mutual fund industry and informed audience that since March 2002 the SECP has authorized nine new open ended mutual funds. There are now 11 open end mutual funds besides 16 closed ended mutual funds and there are four more funds in the pipeline.
The aggregate net asset value of Pakistan's mutual fund has increased from less than Rs25 billion one and a half year ago to over Rs100 billion today.
Farooq Bengali, President and the Chief Executive Officer, Faysal Bank, in his brief welcome remarks lauded the support extended by the government, State Bank of Pakistan and the SECP in development of mutual fund industry.
He made a casual observation that there certain taxation issues, which he hoped, would be addressed by the government.
The Faysal Balanced Growth Fund is being managed by Faysal Asset Management, which is a joint venture between Faysal Bank, AKD and Islamic Investment Company. The fund will be open for public subscription from Monday, April 19.