CONTENTSEditorial 3 I&M Special Feature Pakistan’s Trade Promotion in France 4 I&M Special Feature 3rd FPCCI Achievement Awards 6 I&M Special Feature: Pakistan Investment Conference 2015 11 I&M Special Report: Safe Investments Through Mutual Funds MUFAP – Working Towards Progressive Development - Mashooma Zehra Majeed, CEO, MUFAP 15 Alfalah Investments – A Success Story - Maheen Rahman, CEO, Alfalah Investments 18 NAFA Funds – Exploring a New Possibility Dr. Amjad Waheed, CEO, NAFA Funds 21 Development of Islamic Mutual Fund Industry - Sajjad Anwar, CIO, NAFA 23 Atlas Management Ltd – A Credible Name in Industry - Habib-ur-Rehman, CEO, Atlas Asset Management Ltd 26 Taxation of Retirement Schemes - Mohd. Habib-ur-Rehman, CEO, Atlas Asset Management Ltd 31- Mohd. Shoaib, CEO, AlMeezan Asset Management Ltd Retirement Planning Umber Tanya Ansari, Head of Marketing, UBL Funds 33 ABL Asset Management - Providing Opportunities 35Farid Ahmed Khan, CEO, ABL Asset Management JS Investment, Dr. Ali, CEO, 37 I&M Special Feature TerraBiz Internal Audit Conference 41 Perspective: Integration of Stock Exchanges in Pakistan Mohd. Sohail, CEO, Topline Securities 48 Perspective: Progress in Stock Market Muhammad Azam Khan, CEO, Sunrise Capital Ltd. 49 Company News 51Events 55

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PakistanInvestment ConferenceIslamabad Serena Hotel-October 4-5, 2015

Board of Investment

Iftikhar Ali Malik, Chairman, UBG; Mian Mohd. Adrees, President, FPCCI; S.M. Muneer, CE, TDAP; in a

group photograph with Pakistani-Canadian delegates

Prof S.B. Hassan, President, I&M; Dr. Musadik Malik, Advisor to Prime Minister; Dr. Miftah Ismail, Chairman, BOI;

Mohd Ali Tabba, MD, Lucky Cement Ltd.

Shahid Khaqan Abbasi, Federal Minister, Petroleum and Natural Resources; Arif Habib, Chairman, Arif Habib Group;

Prof S.B. Hassan, President, I&M

Mohd Ali Tabba, MD, Lucky Cement Ltd.; Dr. Miftah Ismail, Chairman, BOI; Engr. Khurrum Dastagir Khan, Federal

Minister, Commerce; Prof S.B. Hassan, President, I&M

Pakistani-Canadian Delegates in a Group Photograph with I&M Officials

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vI&M: As-salaamoalaikum and thank you for warmly meeting with ‘Investment & Marketing’ for an ex-clusive interview at the Pakistan Investment Conference in Islamabad Our first question is: How were you introduced to this conference in Kuwait?

Dr. Mustafa Behbehani: I was introduced to this event in Pakistan by the Ambassador of Pakistan to Kuwait. He saw my activities and good relations with different coun-tries, especially the ambassadors of many foreign countries in Kuwait. My last visit was to Peru, arranged by His Ex-cellency, Mr. Heli Pelaez Castro, The Ambassador of Peru in Kuwait. The Ambassador of Pakistan told me about the Pakistan Investment Conference scheduled in Islamabad. I always wanted to visit Pakistan, so I decided to attend the conference. It was a good decision. The conference is well-organized. All aspects are excellent. The hosts are very gracious and there are participants from many different countries. We were honoured to meet the Prime Minister, the President of Pakistan and Cabinet Ministers. The Presi-dent and Prime Minister gave good speeches to encourage investment. The President talked about changes introduced in Pakistan over the last year to encourage investment. I feel the President of Pakistan is a “Man of People”. He is very warm and friendly. He is trying to help the people. Business is not just for profit. There is social responsibility. Technol-ogy is fine, but you have to educate all levels in society to raise standard of living. My approach is to help all sectors of society. I think about 10 people came from Kuwait for the conference here. Some of them are new. When I go back, I will bring more people.

I&M: What are your professional activities in Kuwait?

Dr. Mustafa Behbehani: I do economic consulting in Ku-wait. I am concentrating on promotion of private enterprise and small business because the Emir of Kuwait is focusing on promoting private sector. He has created a Fund to give loans for development of private sector in Kuwait. We are in the private sector, giving technical training. We have an academy to prepare students for university education. We also invite speakers on leadership and specialized subjects. We want more participation of women in the economy. Ad-vanced countries developed as a result of participation of women and young people in the economy. We want to do the same in Kuwait.

I&M: What is the main message you will take back from this conference?

Dr. Mustafa Behbehani: The main message is that there is a big change in the mode of investment in Pakistan. For example, there is progress in taxation, in regulation and ease of business. For Pakistan, it is a big change. This is what investors want – ease of business. You have competitive labour and good technology skills here. The Prime Minister gave a very good speech. It was very informative.

I&M: A major subject of discussion at the conference was China Pakistan Economic Corridor (CPEC). What are your thoughts on CPEC?

Dr. Mustafa Behbehani: It is the age of China. China is investing all over the world, even in Peru. It is a Communist country but the economy is capitalistic. Pakistan has close relations with China. But, we must remember that Kuwait Fund came before China. It is helping many countries.

I&M: What is the history of economic development in the Gulf?

Dr. Mustafa Behbehani: Seventy years ago, Bahrain was a pioneer in the Middle East. In the Gulf, Bahrain was a pioneer in the 19th century. First Bahrain and then Kuwait. Now, times have changed. There has been a succession of models -- Bahrain, Kuwait, Dubai, Abu Dhabi, Qatar, Saudi Arabia, Omani model. I am impressed with Oman. They have a good administration system in government and good discipline. They do not have financial resources, but they

Dr. Mustafa BehbehaniChairman and Managing Director

Kuwaiti Gulf Group For Economic and Administration Consulting

I&M Interview: Pakistan Investment Conference 2015, Islamabad

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vI&M: As-salaamoalaikum and thank you for warmly meeting with ‘Investment & Marketing’ for an ex-clusive interview at the Pakistan Investment Conference in Islamabad Our first question is: How were you introduced to this conference in Kuwait?

Dr. Mustafa Behbehani: I was introduced to this event in Pakistan by the Ambassador of Pakistan to Kuwait. He saw my activities and good relations with different coun-tries, especially the ambassadors of many foreign countries in Kuwait. My last visit was to Peru, arranged by His Ex-cellency, Mr. Heli Pelaez Castro, The Ambassador of Peru in Kuwait. The Ambassador of Pakistan told me about the Pakistan Investment Conference scheduled in Islamabad. I always wanted to visit Pakistan, so I decided to attend the conference. It was a good decision. The conference is well-organized. All aspects are excellent. The hosts are very gracious and there are participants from many different countries. We were honoured to meet the Prime Minister, the President of Pakistan and Cabinet Ministers. The Presi-dent and Prime Minister gave good speeches to encourage investment. The President talked about changes introduced in Pakistan over the last year to encourage investment. I feel the President of Pakistan is a “Man of People”. He is very warm and friendly. He is trying to help the people. Business is not just for profit. There is social responsibility. Technol-ogy is fine, but you have to educate all levels in society to raise standard of living. My approach is to help all sectors of society. I think about 10 people came from Kuwait for the conference here. Some of them are new. When I go back, I will bring more people.

I&M: What are your professional activities in Kuwait?Dr. Mustafa Behbehani: I do economic consulting in Ku-

wait. I am concentrating on promotion of private enterprise and small business because the Emir of Kuwait is focusing on promoting private sector. He has created a Fund to give loans for development of private sector in Kuwait. We are in the private sector, giving technical training. We have an academy to prepare students for university education. We also invite speakers on leadership and specialized subjects. We want more participation of women in the economy. Ad-vanced countries developed as a result of participation of women and young people in the economy. We want to do the same in Kuwait.

I&M: What is the main message you will take back from this conference?

Dr. Mustafa Behbehani: The main message is that there is a big change in the mode of investment in Pakistan. For example, there is progress in taxation, in regulation and ease of business. For Pakistan, it is a big change. This is what investors want – ease of business. You have competitive labour and good technology skills here. The Prime Minister gave a very good speech. It was very informative.

I&M: A major subject of discussion at the conference was China Pakistan Economic Corridor (CPEC). What are your thoughts on CPEC?

Dr. Mustafa Behbehani: It is the age of China. China is investing all over the world, even in Peru. It is a Communist country but the economy is capitalistic. Pakistan has close relations with China. But, we must remember that Kuwait Fund came before China. It is helping many countries.

I&M: What is the history of economic development in the Gulf?

Dr. Mustafa Behbehani: Seventy years ago, Bahrain was a pioneer in the Middle East. In the Gulf, Bahrain was a pioneer in the 19th century. First Bahrain and then Kuwait. Now, times have changed. There has been a succession of models -- Bahrain, Kuwait, Dubai, Abu Dhabi, Qatar, Saudi Arabia, Omani model. I am impressed with Oman. They have a good administration system in government and good discipline. They do not have financial resources, but they are running the country well with limited resources.

I&M: What are your thoughts on current challenges faced by Kuwait?

Dr. Mustafa Behbehani: After the Iraq invasion in 1990, we closed Kuwait. The model we had, we left it. It was our model and UAE has successfully taken this model. We need to open Kuwait for foreign investment. We have an open society. Hijab is not compulsory. Now we have more women in universities and they have better grades than men. Education is all free. All this was introduced in Kuwait much before Dubai.

There was a government policy in Kuwait to employ, employ, employ. In any country, you need both public and private sector. Socialism has failed. Look at what happened to China. China is socialist in government but capitalist in economics. The lesson is that it is necessary to have both government and private sector for national development.

There was a time when Kuwait was first in many ar-

I&M Interview: Pakistan Investment Conference 2015, Islamabad

H.E. Mr. Ghulam Dastgir, Ambassador-Designate to Kuwait, Visits Federation of Pakistan Chamber of Commerce and Industry and Meets Prof. S.B. Hassan, President, I&M

Mr. M. Farhan Hanif, CEO, Crown Lifan Pakistan (Pvt) Ltd Mr. Teizoon Kisat, CEO, ORIX Leasing Pakistan Limited

Mr. Murtaza Ahmed Ali, CEO, Allied Rental Modaraba

Mr. Muhammad Azam Khan, CEO, Sunrise Capital Ltd.

Mr. Saleem Khan Tanoli, CEO, FAKT Exhibitions (PVT) Ltd.

Capt. S.M. Ajmal Mahmoodi, CEO, Maritime Training Institute.

H . E . M r. M a m n o o n H u s s a i n , P r e s i d e n t o f P a k i s t a n , P r e s e n t s F P C C I A c h i e v e m e n t Aw a r d s t o P r o u d W i n n e r s .

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H.E.Mr. Mamnoon Hussain, President of Pakistan, Presents Gold Medal to Prof. S.B. Hassan, President, I&M

Mr. Hasanali Abdullah, Managing Director, EFU General Insurance Ltd., proudly wears Achievement Award Medal

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In 1977 – President of Pakistan, General Zia-Ul-Haq, announced commendation and award for Prof.S.B.Hassan on the occasion of presentation of a comprehensive report prepared and published by Invest-ment & Marketing Intl. (I&M) under the title “Investment

In 1966 - Field Marshall Ayub Khan, President of Pakistan appreciated Prof. S.B.Hassan for compiling a Special Report on First Ocean Going-Vessel “M.V. Al. Abbas” by Karachi Shipyard and Engineering works (K.S.E.W)

In 2015 H.E. Mr. Mamnoon Hussain, President of of Pakistan conferred the “Achievement Award” (Special “Gold Medal”) to Prof. S.B.Hassan on behalf of FPCCI in commendation of his services and contribution to the Economic & Industrial development of Pakistan

In 2011, H.E. Mr. Asif Ali Zardari, President of Pakistan presented a gold medal to Prof. S.B. Hassan, in appreciation of Prof. Hassan’s services to the print media. The award was titled “APNS Life Achievement Award”

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Karachi Gymkhana Club Awards Shield to Prof S. B. HassanMr. Jahangir Moghul, President, Karachi Gymkhana, gracefully honoured Prof S.B. Hassan with a Shield on

behalf of Karachi Gymkhana to Recognize Prof Hassan’s FPCCI Achievement Award.“Karachi Gymkhana Adabi Mela”, Saturday 31st October, Swimming Pool Garden

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EVENTS

PAKISTAN- TRADE PROMOTION EVENTS IN PARIS-SEPTEMBER 2015

Two major events were organized in Paris by the Embassy of Pakistan, with the main objective of projecting a soft image of Pakistan and making the French business community more aware of the trade and investment opportunities in the country.

37th Edition of Texworld-Parc d’Expositions du Bourget, Pakistan Fashion Show

The 37th edition of Texworld (Fabrics and Apparel Sourcing Fair) was held from September 14-17, 2015 at Parc d’Expositions du Bourget. For Fabrics Sec-tion, there were 945 exhibitors participating from 27 countries whereas in the Apparel Section, there were 400 exhibitors participating from 16 countries. 14254 professional visitors visited the fair.

The highlight of the 37th edition of Texworld was a Fashion Show arranged during the fair by Messe Frank-furt, showcasing apparel from Pakistan and Vietnam.

Ambassador Mr. Ghalib Iqbal ,during a meeting last year with Mr. Sherpe, President of Messe Frankfurt, had put forth the idea of showcasing the products of countries participating in Texworld, through a fashion show. Serena Textiles, SM Denim, Rajby Textiles and Indus Valley School were selected for exhibiting their creations in the Pakistan Fashion Show. The Commer-cial Counselor in Paris, Mrs Ambreen Iftikhar, and her team co-ordinated the event.

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EVENTS

Pakistan Business Conference September 29, 2015, Lyon, France

The Pakistan Mission in Paris held a Business Conference in Lyon on 29th September, 2015

with the collaboration of the Lyon Chamber of Com-merce and Industry. The main objective of the Con-ference was to apprise the business community of the Rhone-Alpes region about the economic opportunities in Pakistan. This initiative has been taken for the first time by the Mission in order to establish trade links with this very important but unexplored region of France.

Prior to the Conference, Ambassador Ghalib Iqbal had a meeting with Mr. Jean-Paul Mauduy, President of Chamber of Commerce and Industry of the Rhone-Alpes Region. The Commercial Counselor, Mrs. Ambreen Iftikhar was also present at the meeting. Mr. Mauduy expressed a keen interest in establishing

business links with Pakistan, for corporate entities as well as for SMEs of both countries.

During the meeting , the Ambassador suggested that since there was a reluctance on the part of the French businessmen to travel to Pakistan because of security concerns, the most efficient and effective way to facilitate the establishment of business links would be to have a Video Conference session be-tween members of the Lyon Chamber of Commerce and members of the Federation of Pakistan Cham-bers of Commerce and Industry ( FPCCI), during the next few weeks.

The Ambassador also met with Mrs. Elizabeth Thion, Vice President of the Lyon Chamber of Commerce and Industry.

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MUFAP — Working Towards Progressive DevelopmentMashmooma Zehra Majeed, CFA, FRM – CEO, MUFAP

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MUFAP’s Accounts and Taxation Commit-tee has always been very active on vari-ous tax-related issues and has primarily led the Voluntary Pension Schemes (VPS) related reforms, introduced over the pe-

riod to create a level playing field in terms of taxation benefits vis-à-vis existing oc-cupational retirement schemes and rec-ommended amendments in labour laws

to incorporate VPS as an eligible retire-ment scheme. The Committee has also

been working on getting the tax credit on investments (mutual funds and volun-tary pension schemes) enhanced over the

period so that savings are encouraged. With these amendments in tax laws, tax

benefits allowed on gratuity and pension offered by employers are at par with VPS.

Alfalah Investment Management Limited is the fastest growing asset management company in Pakistan. In 2014, Alfalah In-

vestments growth was 75 percent whereas the overall industry grew by 20.2 percent. Alfalah Investments. has achieved this through a number of changes in late 2013. In October 2013, the company acquired IGI Funds with a view to increase asset size and re-vamp the existing set-up. The team was revamped to meet the challenges of a merger and to ensure a sustainable and strong future.

One of the first things that Alfalah Investments. focused on was improving the investment returns on funds to ensure ‘best in class’ performance. Alfalah Investments’ was very successful in this regard as the key funds registered strong upward performance throughout the year. For example in the fiscal year 2014, the return of Alfalah Invest-ments Stock Fund was 27.70 percent. Sovereign Fund which was launched in May 2014 gave a sta-ble return of 16.38% and the Alfalah Investments Value Fund also did very well by giving a return of 25.48 percent.

The second thing that Alfalah Investments. did was to enhance penetration and outreach towards the retail client base i.e. individual investors. Al-falah Investments. did that by tapping selected Bank Alfalah branches to distribute and sell mu-tual funds. The company positioned its funds to become viable investment options for individual investors who wanted exposure to capital markets – both bond and stock markets – but lacked the ability or courage to invest directly. In this regard, mutual funds have many benefits for individual investors as they are professionally managed and hold large and diversified portfolios. This leads

to better investment return generation and gives smaller investors the ability to plan ahead finan-cially in an environment which is becoming more challenging.

These actions resulted in strong growth with a very positive response from both the retail and in-stitutional segment. By May 2015 or approximate-ly 18 months post-merger, Alfalah Investments. grew from 10 Billion to over 22 billion. In other words Alfalah Investments has grown by more than 100% in assets under management, making Alfalah Investments. the fastest growing asset manager in Pakistan. The growth was widespread

Alfalah Investments – A Success StoryMaheen Rahman, CEO – Alfalah Investments

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across all primary funds in both stock and fixed income portfolios as Alfalah Investments perfor-mance attracted a large number of investors.

Alfalah Investments success has gained global and local recognition. Alfalah Investments has received two management quality rating up-grades in the last year and is currently rated at AM2- by Pakistan Credit Rating Agency (PA-CRA). In March 2015, Bloomberg quoted Alfalah Investments Stock Fund* as delivering a 475% return to investors since its inception in 2008 which is more than twice the benchmark index and the biggest gain among 34 peers tracked by Bloomberg.

Alfalah Investments has 11 funds under man-agement in various categories such as Equi-ty Schemes, Islamic Equity Schemes, Income Schemes, Aggressive Fixed Income schemes etc. Alfalah Investments Value Fund offers best of both worlds as it invests in Fixed Income schemes along with equities. It is the best per-forming fund in Asset Allocation category with a 25.48% return in the last fiscal year. Alfalah In-vestments Islamic Stock Fund is another exam-ple of Alfalah Investments diversified portfolio as it invests in shariah compliant equity securi-ties and gave a return of 23.79% in the last fiscal year. In addition to this Alfalah Investments also offer investment advisory services which are for bigger clients and corporate clients.

Alfalah Investments. would like the tax regime to favor small investors but not discourage larger in-stitutional investors. Alfalah Investments must be careful not to make mutual funds completely tax ineffective as investments, as savings and invest-ment growth are vital for our country’s develop-ment. At the moment, mutual funds are subject to general sales tax, federal excise duty, capital gains tax, and dividend withholding tax. Asset manag-

ers also pay corporate income tax. These are heavy payments for what is supposed to be a savings and investment vehicle; in particular there are a num-ber of distortions in the dividend withholding tax that need to be addressed. In the recent Finance Bill one feels grateful that the Workers Welfare Fund tax was removed from mutual funds; Alfalah Investments is hopeful that the government will address other taxation matters as well so that Al-falah Investments are able to increase the pool of small savers in the country.

Alfalah Investments wants to change the way Pakistani’s think about mutual funds. With the right approach, Alfalah Investments can make investments and savings part of Alfalah Invest-ments’ national psyche and achieve financial inde-pendence on a micro and macro level. There is no quick fix. One has to learn that it takes time for an investment plan to give results, as investments are always made with a medium to long term horizon.

At Alfalah Investments we constantly try to intro-duce innovative products that suits our investors saving needs. We have recently launched a new fund ‘Alfalah GHP Prosperity Planning Fund’. It is an open ended fund with 3 plans within one fund which enables our investors to enjoy the exposure of stock market while keeping the risk factor in check. Our conservative plan will be investing up to 20% in stocks, our moderate plan will be invest-ing up tot 40% whereas the active allocation plan as the name suggests can go up to 100% in stocks. All three plans will be investing a significant per-centage in equities and coupled with calculated risks in stocks hence ensuring a steady return. This fund will greatly benefit the investors who had al-ways wanted to invest in stocks but were vary of the market fluctuations and the risk involved in di-rect investments. ‘With Alfalah GHP your invest-ments are in good hands’

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Dr Amjad Waheed holds a doctorate degree in Business Administration with a major in Investments and Finance from Southern

Illinois University, USA and is also a Chartered Fi-nancial Analyst (CFA). Dr Amjad has been associ-ated with NAFA since its inception in 2006. Prior to joining NAFA, he served as the head of Equity Mutual Funds and Portfolios at Riyadh Bank, Saudi Arabia for five years where he managed around 7.5 billion US dollars invested in 22 mutual funds. Be-fore that, Dr Amjad was the Head of Asset Manage-ment at NIT and Chief Operating Officer of FC ABN AMRO Equities for several years. Before moving back to Pakistan, he worked as Assistant Professor of Finance at Tennessee State University, USA and published several articles in top journals of the world such as the Journal of Banking and Finance and Fi-nancial Management. Following is an interview with Dr Amjad Waheed.

What is the success story of NAFA since its inception?

NAFA is a joint venture between National Bank of Pakistan and Fullerton Fund Management Company of Singapore. It is now in its tenth year of operation. We are among the top four highest rated asset man-agement companies in the country that have been awarded an AM2+ rating. The rating agency, PA-CRA, states that “The rating reflects the company’s strong capacity to manage risks inherent in the as-set management business. The Asset Manager meets high investment management industry standards and benchmarks. We are presently managing over 40 bil-lion rupees of investors’ money.

What are the key products and services offered by NAFA? Investors’ risk, return profile and investment

needs dif-fer. Recog-nising this, NAFA has l a u n c h e d m u t u a l funds and p e n s i o n funds in the low, me-dium and high-risk / return cat-egories. We have a num-ber of shari-ah-compli-ant Mutual and Pension Funds as well, and this is our fastest growing area. In addition, we have over 100 investment advisory mandates from corpora-tions and high-networth individuals to manage their employees’ or personal funds. Our flagship fund is NAFA Stock Fund that has provided a 353 percent return to its investors over the last five years. This means that if someone invested one crore rupees in the fund five years ago, that investment is worth 4.5 crores today. The Fund has comprehensively beaten its benchmark (KSE 100 Index) and the Peer Group during this period.

What are the tax benefits of investing in Mutual and Pension Funds?

Mutual Funds and Pension Funds offer attractive tax benefits to individual investors. By investing in Mutual Funds, an individual investor can reduce his / her tax liability by 20 percent whereas by investing in Pension Funds, the investor can further reduce the tax

NAFA Funds-- Exploring a New PossibilityDr. Amjad Waheed, CEO, NAFA Funds

liability by 20 to 50 percent, depending upon the age of the investor. Furthermore, long term gains realised by the investors are tax-free, making Mutual Fund/Pen-sion Funds attractive investment options for the inves-tors. In the recent budget, the maximum investment amount to claim tax benefit has been increased from one million to 1.5 million rupees that should further en-hance the savings rate in the country.

What are the future prospects for the industry? In Pakistan, the total size of the Mutual Fund industry is 444 billion rupees (4.4 billion US dollars), which is 1.8 percent of Pakistan’s GDP (economy). In India, the total size of the Mutual Fund industry is 191 bil-lon US dollars, which is 9.3 percent of India’s GDP. If the Mutual Fund industry in Pakistan had grown at the same pace as in India, the total size of the Mutual Fund industry would have been 24 billion US dollars rather than 4.4 billion US dollars. This would have helped to increase the savings and investment rates of Pakistan, which at around 15 percent of GDP is among the lowest in the world. This would have also helped the government reduce its reliance / borrow-ing on foreign donors and countries. To help increase the size of the Mutual Fund industry, the government needs to facilitate the industry and remove impedi-ments in its growth. SECP is already playing a key role in bringing the industry regulations in line with international standards. To this end, SECP is in the process of amending NBFC rules and regulations in the near future

Where do you see NAFA in the next 5-10 years?

Presently, there are less than 200,000 investors in the Mutual Fund industry compared to about 30 million bank account holders. Thus there is a tremendous poten-tial for the industry to grow its retail business. At present, NAFA has about 250 sales staff, marketing and selling NAFA Mutual and Pension Funds throughout the coun-try. We plan to grow this sales team to 1000 sales staff in the next five years. This sales team will help investors in

their financial planning to achieve their financial targets towards education and marriage of their children, owning their own home, and meeting regular monthly expenses, especially after retirement. In line with international stan-dards, there is now better awareness among corporations that they do not have the time and / or the expertise to manage their employees’ funds in-house. Thus corpora-tions have already started engaging Investment Advisors to help them with their investment decision making for treasury money and employees’ retirement funds. NAFA is already providing investment advisory services to doz-ens of corporations, and expect to expand this business manifold in the future.

What is your message to the investors?

People in Pakistan generally keep their savings in banks and national savings schemes. However, the return on these savings is very low and does not even compensate for inflation. It is, therefore, important for individuals to explore the possibility of investing in Mutual Funds. There are various categories of mu-tual funds with varying degrees of risk and return pa-rameters. Investors need to understand what type of mutual fund investment will suit them based on their own risk profile and investment time period. Over the last 14 years, the average return on the stock mar-ket has been around 24 percent per year, whereas the average return on bank deposits has been about six percent per year. Hundred rupees invested 14 years ago in banks would have grown to 225 rupees to-day, whereas 100 rupees invested in the stock market would have grown to 2,130 rupees by now. For in-vestors who have long investment horizons, it may be desirable that some portion of their assets should be in real estate and the stock market where the ex-pected return is higher than bank deposits and na-tional savings schemes in the long run. The best way to invest in equities for an individual investor is via mutual fund with a good track record, as an average investor may not have the time or the expertise to invest directly in the stock market.

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As a matter of faith Islamic financial system holds immense potential in our country as manifested by the manifold

growth of Islamic banking industry over the last decade with Islamic banking deposits currently comprising around 13% of overall banking sector deposits. This has come despite multifaceted chal-lenges facing the industry from scarcity of trained human resource to limited investment avenues and weak legal system, etc. But unfortunately we have not seen such growth in the mutual fund sector. We attribute this anemic growth of Islamic mutual fund industry to lack of awareness of mutual funds in general, excessive taxation, limited regulatory support, weak legal framework, and lack of depth of Islamic (debt) capital market.

Currently mutual fund industry offers a wide range of investment avenues under shariah com-pliant categories to cater to the varying financial needs of investors. The safest category is money market funds that invest primarily in bank depos-its and GOP Ijara Sukuk. Income funds are low risk and low expected return avenues that invest in a wide range of fixed income asset classes such as corporate sukuks, GOP Ijara Sukuks and bank deposits. Moderate risk and return, balanced and asset allocation funds invest in diversifies as-set classes such as money market, fixed income and equities. Stock funds are high risk and high expected return category that invest primarily in equities. However, in the fixed income category,

limited investment universe constraints the abil-ity to generate competitive returns and achieve the desired level of diversification. All investments in the shariah compliant funds are approved by the

Mr. Sajjad Anwar joined NAFA in June 2007 and gradually progressed to the position of Chief Investment Officer. As head of investment manage-ment function at NAFA, he has suc-cessfully launched and managed sev-eral mutual funds and advisory port-folios in equity, fixed income, and money market categories with a superior

performance track record. Prior to joining NAFA, he was working as Manager Strategic Risk Man-agement with Ar my Welfare Trust (AWT). He also served Shifa Foundation as Asst. Manager Finance & Accounts. Mr. Sajjad Anwar holds an MBA in Finance and is a CFA Charterholder.

Sajjad Anwar, CFAChief Investment Officer, NAFA

Development of Islamic Mutual Fund Industry

shariah advisor. For investment in equity markets, a screening cri-

teria for shariah compliant stocks has been devel-oped that evaluates companies for both permissibil-ity of underlying business using source of income benchmarks as well as funding of operations using balance sheet composition benchmarks. This cri-terion has wider market acceptance. Currently, shariah compliant uni-verse comprises around 60% of total stock mar-ket capitalization.

Exorbitant taxes and other levies applicable on the mutual funds put mutual funds at a dis-advantage compared with alternate invest-ment vehicles. For in-stance, imposition of 16% FED, in addition to 15% sales tax on mu-tual funds is onerous burden for investors. In other words, these cost components act as a drag on the returns available to the mutual fund investors rendering this option uncompetitive vis-à-vis alternative in-vestment avenues thereby becoming a major deter-rent in the growth of the mutual fund industry.

To promote Islamic capital markets SBP has taken a lead role. Being the regulator of the bank-ing industry, SBP has devised a very comprehen-sive regulatory framework that has achieved ini-tial success as reflected by the robust increase in the deposits of the Islamic banks over the last few years. To this end, conventional banks were allowed to open Islamic windows to expand the branch network. Now, SBP is moving forward another step where conventional banks are being

required to set-up their Islamic banks subsidiar-ies for the proper segregation of assets and li-abilities of two sides (conventional & Islamic). Moreover, SBP has set-up a shariah advisory board represented by renowned shariah advisors for the standardization of various products and strengthening the regulatory framework.

Though initially SECP- the regulator of mutual fund industry- lagged SBP in the development of capital markets due to resource constraints, it is catching up now. It has recently established an Islamic Finance Depart-ment (IFD) for achiev-ing the objective of a ro-bust and credible Islamic capital market. Further, SECP and State Bank of Pakistan have estab-lished a Joint Forum on Islamic Finance focus-ing on the promotion of takaful industry with the aim of gaining the Islam-

ic banks’ support for its development. These are welcome developments however much needs to be done.

Narrow eligible shariah compliant investment universe and limited liquidity management tools act as a drag on the return potential and risk man-agement strategy thereby impeding the growth of Islamic mutual fund industry. Without a level playing field in terms of fair taxation, regulatory support in line with the international best practices and focus on research and development, the real potential of the Islamic mutual fund industry in promoting savings and channeling it to economic development would remain elusive.

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Atlas Asset Management Ltd. A Credible Name in the Asset Management IndustryHabib-ur-Rahman, Chief Executive Officer Atlas Asset Management, is an FCA from the Institute of

Chartered Accountants of England and Wales and has attended the management level program (PMD) from Harvard Business School, USA. He has been a founding member and past Chairman/Director of the Mutual Funds Association of Pakistan. He played an instrumental role in setting up the first open-ended mutual fund in the private sector in Pakistan. He has been SECP’s nominee on the Board of Karachi Stock Exchange in 2000, 2001 & 2003, and has also been a member of the Commission’s Advisory Group on Capital Markets and the Commission’s Enquiry Committee on Management of Exposure Rules by KSE/LSE. v

Mr. Habib-ur-RehmanChief Executive Officer, Atlas Asset. Management

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Karachi Mystic Festival, Organized by Atlas Asset Managment & Rumi Love Foundation at Beach Luxury Hotel, Karachi

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In Apr il 2008, Atlas Funds had reached a level of Rupees 9

bil l ion in a per iod of l i t t le over four years.

We stand at Ru-pees 13 bil l ion. I am pleased to state that those of our inves-tors who decided

to continue with their investment have made

good gains.

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Taxation of Retirement SchemesM. Habib-ur-Rehman, CEO, Atlas Asset Management Limited and

Mohammad Shoaib, CEO, Almeezan Investment Management Limited.

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Retirement PlanningUmber Tanya Ansari , Head of Marketing, UBL Funds

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Mutual funds are the go-to investment vehicle for the general public offer-ing multiple advantages such as pro-

fessional expertise, diversification and simplic-ity. Unlike conventional bank deposits that offer low rates of return and at times little or no diver-sification, mutual funds are a diversified bundle of investments, offering attractive returns with inherent tax benefits for investors. As mutual funds have no holding period requirement, in-vestors can redeem funds at any time.

Mutual Funds in Pakistan are a relatively new concept and their popularity has picked up pace in the last 10 years amongst both retail and corporate investors. Industry growth has been robust where Assets Under Management (AUM) have crossed PKR 425 billion (June 30, 2015), managed by 22 Asset Management Companies (AMCs). AMCs in Pakistan especially those backed by established commercial banks showcase diversified saving products and investment options designed to cater to all sorts of investors.

ABL Asset Management Company Limited (ABL AMC), a wholly owned subsidiary of Al-lied Bank Limited, is one of the largest Asset

M a n a g e m e n t Companies in Pakistan in terms of Assets Under Manage-ment (AUM). The company is rated AM2 by JCR-VIS which denotes High Manage-ment Quality and is the only asset manager in Pakistan which is both ISO 27001 and GIPS complaint. As of 30th June 2015, the company was managing over Rs.30 billion of both re-tail and institutional investments via its mutual funds as well as discretionary and non-discre-tionary accounts.

ABL AMC’s funds have consistently ranked amongst the top performers in their respective categories. JCR-VIS has recently upgraded the performance ranking for ABL Islamic Stock Fund, launched on June 12, 2013 to MFR – 5

Farid Ahmed Khan, CEO, ABL Asset Management

Star (1 year weighted average ranking for the period ended June 30, 2015). The company is known for product innovation and is managed by a highly skilled team of professionals.

With a dedicated sales team and a network of over 1000 branches of Allied Bank Limited, ABL AMC is an active player in creating awareness and pen-etrating into the retail segment to promote the mutu-al funds industry in Pakistan along with takng steps to provide dedicated wealth management solutions for its Institutional and Retail investors at their door step. The company also has a growing list of online services which allow investors to manage their in-vestments conveniently through the web and emails.

Apart from collective investment schemes, as-set management companies are now actively of-fering advisory and portfolio management ser-vices for retirement funds and high net worth clients. Employee funds can benefit significant-ly from these tailor made products, which offer superior investment management and expert ad-vice. ABL AMC is actively offering this service for both local and foreign corporate in Pakistan.

Under SECP regulations, ABL AMC is also an approved pension fund manager amongst a select group of AMCs that cater to labour and self-em-ployed personnel. SMEs which make up a vast majority of the workforce are least interested in employee future planning, As a result this mar-ket remains oblivious to VPS and tends to focus on the present rather that the future. ABL AMC intends to tackle such segments propagating the importance of retirement planning.

Going forward our focus will remain towards launching products designed to fulfill the in-vestment needs of the masses along with en-hancing market awareness in retail segments. While ABL AMCs product are also available at over 1000 branches of Allied Bank Limited, establishment of dedicated branch network i.e. ABL Asset Management Savings Centre is in full swing with the branches opening up in ma-jor metropolis like Karachi, Lahore, & Rawal-pindi. Walk in customers will be able to ben-efit from our wide network of branches where customer facilitation officers will be available to furnish client requests.

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I&M Interview

Dr Ali Akhtar Ali CEO, JS Investments Ltd.

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Mohammed SohailChief Executive Topline Securities

Integration of Stock Exchanges in Pakistan

In a major development 3 stock exchanges in Pakistan has agreed to inte-grate themselves. According to the understanding Trading Right Entitle-ment Certificate (TREC) Holders of LSE and ISE would be issued TRECs

of KSE and shall be treated at par with existing TREC Holders of KSE.The efforts were going on since last one decade. However after the passing

of Demutalization Act and efforts by the apex regularos helped in raching this big achievement

Integration of the three stock exchanges has been proposed keeping in view global trend towards consolidation of businesses of stock exchanges. This will help finding a suitable strategic buyer for the exchange which can bring much needed depth and breadth in the local bourse

One more benefit of this integration is that now the issuers and other stakeholders shall have single entity to deal with for all regulatory and compliance requirements. Consolidation of businesses of all stock exchanges would ensure that the capital markets are conducted and regulated in a transparent, efficient and concentrated manner by single frontline regulator as well as SECP, being the apex regulator, which will lead to long term benefits in the best interest of the public at large. This integration will also enable optimal utilization of available resources; rationalization of overlapping facilities, infrastructure and regulatory mechanism; improvement in overall com

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First Capital Investments Limited.First Capital Investments Limited (FCIL), a subsidiary of First Capital Securities Corporation Limited, is a Non-Banking Finance Company licensed to

carry out Asset Management services as under the NBFC Rules 2003 and is regulated by the Securities and Exchange Commission of Pakistan. Cur-rently, FCIL is managing First Capital Mutual Fund an equity fund. The fund has provided the following returns for last three years.

The management of the Company is continuously striving for the improve-ment in performance of the fund under the management of the Company.

YEAR 2013 2014 2015RETURN 37.17 % 23.64 % 15.82 %PAYOUTS 18.00 % 13.50 % 07.10 %

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I&M: Please take us through the success of Sunrise Capital since its inception.Sunrise Capital (Pvt.) Ltd. began its operations in the year 2009. It is now one of the leading corporate stock broker-age houses in Karachi Stock Exchange, holding Trading Right Entitled Certificate (TREC) of KSE Ltd. After 15 years of experience and proper understanding of equity investments, I decided to initiate a new venture through which investors can be guided with confidence for invest-ing in higher-return stocks. Our risk management depart-ment works intelligently, allocates the risk, and guides investors accordingly to mitigate risk. We meet all perti-nent international standards. Moreover, we give our valu-able customers outstanding customer service which helps them make profitable investment decisions.

I&M: What products do you offer to your investors?Sunrise Capital (Pvt.) Ltd. provides all clients, including both local and international investors, a link to the fi-nancial markets by engaging Equity Traders who carry out the investors’ order to buy or sell securities. SRC also provides an excellent collection of financial services, in-cluding financial planning and educational programmes to give basic know-how to the clients who are interested in investing their capital in the stock market. We provide intra-day market quotes, closing rates, daily, weekly and monthly charts, essential technical information, market news, position, trading advices, daily economic calendar and trading calls which are available on e-mail & SMS, and much more to our esteemed clients.

I&M: What makes you different from other broker-age and trading houses?Sunrise Capital (Pvt.) Ltd. has maintained its tremendous reputation for proficiency and truthfulness in serving in-dividuals and institutions. The competitive strength of the company is the application of uniqueness in provid-ing better guidance to the clients regarding their invest-ments in capital market. The creativity of the company is derived from the combination of years of experience in the stock exchange, experienced professionals with more than two decades of experience, an experienced team with a clean compliance record, financial accountability and a superb research department. It has a distinctive and

excellent track record of trading. Its diversified business portfolio is exclusively aimed towards providing a solu-

tions-oriented investment platform blended with enor-mously enriched practice, conviction, truthfulness, risk diversification and integrity.

I&M: What suggestions do you have for the general investors to play safe in the stocks?Investors should adopt the strategy of portfolio manage-ment and avoid putting all their ‘eggs in one basket’. Hence they should spread their investment and diversify their portfolio. Investors should not believe in rumors and always invest in such scrips with strong fundamental and technical analysis. Investors should focus on annual returns rather than flat commission and higher leverage while opening an account in any brokerage house.

I&M: Where do you see Sunrise Capital (Pvt.) Ltd in the next 5-10 years?As CEO, I always desire to see my brokerage house at its peak. Contemporary situation of the stock market is that it has recovered compared to 2009. The current economy, political stability and law and order situation in Pakistan have become much better. The current inflation of Pakistan is at its lowest i.e. 1.75%. Furthermore, exist-ing interest rate of Pakistan is 6% which is the lowest in decade, with highest ever foreign exchange reserves at $20 billion. Hence, it is beneficial for the stock market, as it will attract investors for privileged returns. Moreover, Sunrise Capital (Pvt.) Ltd. faced its toughest time from 2009 to 2012. I believe that in the next five years, Sunrise Capital (Pvt.) Ltd. would be on the list of top five broker-age houses in Pakistan.

Sunrise Capital – Progress in Stock MarketMuhammad Azam Khan Chief Executive, Sunrise Capital (Pvt.) Limited

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Bank Alfalah earns Rs 10.283 billion profit before tax in Q3

Bank Alfalah’s financial results for the nine month period ended September 2015 remained positive, with the Bank registering profit before taxation of Rs 10.283 billion a solid growth of 68 percent, as against the cor-responding period last year. The Bank’s profit after tax was recorded at Rs 6.044 billion in September 2015 as compared to Rs 4.015 billion in September 2014.

Earnings per Share improved to Rs 3.80 at the end of the third quarter 2015 from Rs 2.92 reported in September last year. Atif Bajwa President & CEO of the Bank said “Bank Alfalah continues to grow consistently and deliver sound financial performance despite a challenging external environ-ment. We continue to increase our profitability and for the first time in the Bank’s history, our profit before taxation has crossed the Rs 10 billion mark.

We are optimistic that we will continue to maximise shareholder value while creating innovative solutions to help our customers succeed.” Ex-pense management controls were further strengthened during the period and resultantly the Bank’s cost to income ratio stood at 56 percent, a signifi-cant improvement from 67 percent for the prior corresponding period. The Bank’s total assets at the Balance Sheet date stand at Rs 789.413 billion,

increasing by 6.2 percent from the year end position in 2014. The Bank’s lending activity remained healthy with Net Advances reported at Rs 302.113 billion in September 2015 as against Rs 290.597 billion in December last year. As at 30th September 2015, the Bank’s Non-performing loans (NPLs) ratio stands at 5.8 percent, which is better than the industry average.-PR

MUFAP Elects Shahid Ghaffar as Chairman

Members of the Mutual Funds Association of Pakistan (MUFAP) have elected new directors on their board after the rotational retirement of some directors. The new MUFAP Board of Directors (BoD) in its first meeting on Thursday elected Shahid Ghaffar as the new chairman, Mir Muhammad Ali as senior vice chairman and Imran Azim as vice chairman. Other elected directors include Mohammad Shoaib, Rehan Shaikh, Dr Ali Akhtar, Ma-heen Rahman, Imran Motiwala, Shahzad Jawahar, Babar Ali Lakhani and Mashmooma Z Majeed.

The meeting of the new board paid rich tributes to the outstanding ser-vices rendered to MUFAP by its outgoing Chairman Mohammad Shoaib, Senior Vice Chairman Shahid Ghaffar and Vice Chairman Yasir Qadri and the outgoing directors M Habibur Rahman, Dr Amjad Waheed and Farid Ahmed Khan, through sound leadership they provided to the industry.

COMPANY NEWS

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Engro Corporation Ltd. Celebrates 50 Years Since Inception

In a grand event organized by Engro, the Company celebrated fifty years since its inception in 1965. Khalid Siraj Subhani CEO and President Engro Corporation, while addressing the media drew parallels between the Company then and now. He stated that what started as a single product Company has now diversified in to a diversified conglomerate with interests in multiple industries. The Company has grown from strength to strength and now employs over 3,800 employees versus less than 100 at the time of its inception.

Deeply embedded in the value chains in the industries that the Company operates, Engro maintains a presence in over 300+ cities acrossPakistan and beyond. Khalid Siraj Subhani who has been an Engroveteran is a prime ex-

ample of the Company’s strong promote-from-within culture and has served the business in various roles for over three decades. He further highlighted that since its beginning the Company has showcased stellar growth and compared to 1960s has grown approximately 170 times in revenue terms.

He further said: “Engro is one of Pakistan’s largest conglomerates celebrating 50 years is a huge achieve-ment for us. Integrated in the agricultural and dairy sector we reach out to approximately 1.8 million farm-ers, directly benefiting almost 13 million lives in the agri-dairy space. Our food products nourish 12 million consumers every day, and given our interventions in the energy sector of the country we believe we are well placed to impact a wider audience in a more meaning-ful manner.”

Naila Kassim, Manager HR and Corporate Communications also addressed the attendees and thanked them for their constant support that media and other stakeholders have extended to the Company over time. Engro Corpo-ration’s 50 year celebration also marked the unveiling of the first ever media campaign reflecting the Company’s array of businesses and how it has been an integral part in uplifting the lives of people since 1965.

COMPANY NEWS

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COMPANY NEWS

Strongest Bank by Balance Sheet in Pakistan Allied Bank Wins Asian Banker Award

Allied Bank Limited has been named as the Strongest Bank in Pakistan in the Asian Banker 500 (AB 500) Strongest Bank by Balance Sheet Ranking 2015. AB 500 is an evaluation of the 500 largest banks in the Asia Pacific region for the financial year 2014. The AB 500 Strongest Banks by Balance Sheet Ranking is the most comprehensive annual evaluation that captures the qual-ity and sustainability of the balance sheets of banks in the region. It tracks the relative financial strengths of banks in response to their respective market conditions, based on a common scorecard. Tahir Hassan Qureshi, Chief Operating Officer, Allied Bank Limited, re-ceived the award in a ceremony held at Sands Expo and Convention Centre, Marina Bay Sands, Singapore on October 13, 2015.

Allied Bank Limited has been declared as the strongest bank in Pakistan, based on its financial results in 2014. The Bank’s impressive showing was under-scored by robust results in its profitability and risk profile metrics, especially

its return on asset and capital adequacy ratios. The award also recognizes the strength, liquidity and sustainability of the Balance Sheet in a challenging market place, relative to peers in the industry.

SECP Holds Seminar on Financial LiteracyThe Securities and Exchange Commission of Pakistan (SECP), in order to further its endeavours to raise awareness about safe investments and build investor confidence organised a seminar for the students of RIPHAH International University. The bespoke seminar was designed to promote financial literacy and to increase investor awareness. This was the second seminar conducted by SECP at the university; the first was for undergraduate students and this time the seminar targeted students pursing Masters level education. The educational seminar in particular focused on motivating the students to educate themselves about the role of SECP as the apex regulator of the Non-Banking financial sector of Pakistan’s economy. It encouraged the students to acquire learned financial behaviour as early as possible in their career pursuit to equip them with the requisite financial understanding for making responsible and well considered investment decisions in the future. In this context the focus of the seminar remained on promoting a culture of savings and investments. The seminar also focused on capital markets and mutual funds. Another key feature of the program focused on educating the students about the investor education portal launched by SECP titled ‘Jamapunji’, its rich contents and multiple features. The seminar was attended by a good number of students, working professionals and serv-ing army personnel pursuing higher education in the field of Project Management. The seminar was followed by an interactive discussions and a Q&A session. The participants were quite appreciative of SECP efforts in developing an informed investors’ class in the country.

Tahir Hassan Qureshi, Chief Operating Officer

Mr. Zafar Hijazi,Chairman, SECP

Company News

PPL held an AGM meeting on September 30, 2015. PPL’s newly-appointed Manag-ing Director and Chief Executive Officer

Syed Wamiq Bokhari attributes the financial nega-tive to declining international crude oil prices and unfavourable rupee-dollar parity. “Our production though has risen this year, profits declined because of factors such as declining international oil pric-es and the exchange rate,” Bokhari told the AGM. Shareholders of PPL, a public sector producer of natural gas which recently has been restructured from a decades-old functional matrix to an asset-based hybrid, approved the company’s financial statements together with the auditor’s report for the fiscal year ended June 30, 2015 besides pay-ment of a final cash dividend of 40 percent on ordi-nary share capital. The shareholders have already got an interim cash dividend of 45 percent on their ordinary share capital holdings. Later, talking to reporters, the managing director said the overall production of hydrocarbons in the country was sliding and his company, therefore, had planned to go for “aggressive” and enhanced exploration ac-tivities in non-conventional “difficult” areas like Balochistan and Khyber Pakhtunkhawa where the security situation was uncertain and basic infra-structure missing.

The Managing Director said that the current downward trend in international oil prices was a real challenge to oil producing entities world over. Important here, he said, was the supply and demand which, according US’s Energy Information Ad-ministration, would cross over by the end of 2016. “Historically, oil prices never have remained down for more than 3-4 years,” the PPL official said. Terming FY15 as a “tough year” for oil and gas sector in his review, Chairman of PPL’s Board of Directors Waqar A Malik said in the space of a few months, oil prices nosedived from a high of $109 a barrel to a low of $59 at June 30 this year. “Fur-ther decline, he added, was witnessed on August 20 when the oil prices ebbed to $46 per barrel.

PPL Annual General Body Meeting

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EVENTS

Mr. S.M. Muneer, Patron-In-Chief, KATI, and Mr. Zahid Saeed, Newly-Elected President of KATI, Other KATI Officials Present Shield to Major General Bilal Akbar, DG Rangers (Sindh)

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Korangi Association of Trade & Industry – Annual Dinner

Symposium / Exposition in Berlin, Germany from 11th till 13th November 2015.German Pakistan Trade and Investment (GPTI) has organized a 13-member delegation cum exhibitors to par-ticipate in a Symposium plus Exhibition in Berlin from11th to 13th November, 2015. This Berlin event is be-ing organized by BME. BME is a German association which is currently attempting to seek overseas, potential business and trade in order to outsource, transfer knowledge and to achieve joint collaboration with host nations. The 13-member delegation from Pakistan includes the following companies: Atco Laboratories Limited, DS-Concept, Kwick High Tech & Solutions (Pvt) Ltd., Nazer & Co, Saira Industries, Thal Engineering, and Wa-terlink Group of Industries.

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EVENTS