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EOBI to pool Rs3bn, SLIC Rs2bn, NBP Rs2bn, besides other banks, financial institutions
Friday, July 25, 2008
By Salman Siddiqui
KARACHI: The authorities have decided at a meeting held on Thursday that Equity Market Opportunity Fund (EMOF) would be an Open-End Fund.
The EMOF to be launched from Friday (today) would be injected in stock markets under NIT management when market is under pressure.
A meeting held to finalise the modalities of the fund was held between the officials of Securities and Exchange Commission of Pakistan (SECP), Karachi Stock Exchange (KSE) and Financial Institutions. The participants showed their firm commitment to pool their funds in EMOF.
The object of establishing fund is to provide stability and liquidity to the market in times of stress, according to terms and conditions the participants agreed.
The initial size of fund was declared at Rs20 billion, but owing to its attractiveness of being an open-end fund, the size might inflate to any level.
The general public would also be able to invest in this fund and the National Investment Trust (NIT) would be announcing its daily NAV value and dividends, sources said.
NIT would form a separate board to manage the fund. The board would be meeting at least after every six months or in case of emergency too.
Initially, EOBI has confirmed to pool Rs3 billion; State Life Rs2 billion and Rs2 billion by National Bank, besides other financial institutions and banks would share rest of funds, sources said.
This fund would be invested in KSE 100-share Index instead of KSE 30-share Index as was informed earlier. The fund would not be invested in more than 50 companies.
Fund shall be required to remain invested for the period unless the KSE 100-Index recover 7.5 per cent from entry point.
The NIT management shall be required to complete the exit by the way of sale of share in the market and realize the invested money and go for the forced redemption of units issued.
The above strategy would ensure that the fund of the participants are not stuck up, is efficiently used, the short term profits from the operation are included in their income statements which would have a consequential effect on the market.
After successful operation of the Fund for initial period of six months the fund shall be made widely available to public. No brokerage will be charged when NIT will use such Funds to invest in stocks markets.
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ISSN 1563-9479 
