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WASHINGTON, D.C., September 23, 2004 —
The International Finance Corporation, the private sector arm of the World Bank Group, today announced a commitment to invest the Pakistan rupee equivalent of $5 million in the ABAMCO Composite Fund. ABAMCO Ltd, the fund manager, is a subsidiary of the Jahangir Siddiqui and Company, which is a listed financial management company. As of July 30, 2004, ABAMCO’s total assets under management were about US$200 million equivalent.
The ABAMCO fund, with a target size of $73 million equivalent, has been listed since June 21 on all three bourses in Pakistan: the Karachi Stock Exchange, the Lahore Stock Exchange, and the Islamabad Stock Exchange. The ABAMCO fund targets investments in large capitalization listed securities, pre-initial public offering positions, and local currency debt/money market instruments in Pakistan.
IFC’s investment in ABAMCO is underpinned by supporting the efforts of the Pakistani government to develop the mutual fund industry, promote the development of local capital markets, broaden the long-term investor base in Pakistan’s stock markets, and assisting the government’s privatization program by bolstering the capital base of the fund.
Sami Haddad, IFC director for Middle East and North Africa, said, "The ABAMCO Fund will expand the menu of viable investment choices for Pakistani savers, especially in an environment of shrinking returns on bank deposits and on government saving schemes. IFC’s investment in one of the largest closed-end funds in Pakistan will give liquidity and depth to the local mutual funds industry. Concurrently, it will also provide comfort to a wider group of investors, including foreign fund managers considering portfolio investments in Pakistan."
Haydee Celaya, IFC director for Private Equity and Investment Funds, added, "IFC has played a key role in bringing the proposed fund to international standards, particularly with the fee structure, liquidity feature for investors, and best industry practice for reporting. With the improved macroeconomic environment in Pakistan, there is now a strong need to develop the mutual funds industry to provide local investors with viable investment alternatives, and help deepen financial markets in Pakistan."
Mr. Jahangir Siddiqui, the founder of Jahangir Siddiqui Group, added, "Foreign participation in the mutual fund industry, especially by institutions of IFC repute, can give this industry the required depth and maturity to help bolster Pakistan’s economic development prospects. The initiative taken by IFC to help develop the mutual fund industry in Pakistan is visible from the long-term support it has extended to this industry. IFC, apart from being a joint venture partner of ABAMCO Limited, has also participated as a pre-initial public offering investor in our BSJS Balanced Fund. The Corporation has also been a core investor in ABAMCO’s Unit Trust of Pakistan".
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
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