Sharpened market sentiments owing to smooth political transition and developments on the economic front have all lent a hand in supporting the local bourse to touch fresh highs since 2013.
With the strong performance of equity market, mutual funds have reveled in the soaring returns of equity market where PICIC Growth Fund (PGF) seems to have harvested mind-blowing profits. A glance at its half-yearly results bolsters this view.
Capital gain on sale of net investments registered a phenomenal increase of 111 percent during 1H FY14 to stand at Rs312 million. By the same token, dividend income, unrealized appreciation on re-measurement of investments and profit on bank deposits surged by 20 percent, 49 percent and 72 percent, respectively.
Consequently, PGFs total income clocked in at Rs608 million, depicting a substantial rise of 67 percent year on year.
On the expenses front, the operating expenses marked a rise of 53 percent to stand at Rs84 million in 1H FY14. But on the positive side, operating expenses consumed about 14 percent of total income in 1H FY14, compared to 15 percent in the same period of last year. This improvement owes to the growth in capital gain on sale of net investments.
PGF also booked a provisioning expense worth Rs10 million for Workers Welfare Fund, which is 69 percent higher year-on-year basis.
Thanks to the gains highlighted above, PGFs net profit rose from Rs303.1 million in 1H FY13 to Rs513.5 million 1H FY14, posting a sizeable hike of 69 percent year on year. While excluding the impact of re-measurement of investments, the fund achieved a net profit of Rs353 million, surging by 80 percent vis-à-vis the same period of last year.
Going forward, the continuity of positive economic developments is expected to bode well for local equity market, which in turn will help equity funds to perform better.
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PICIC GROWTH FUND - FINANCIAL HIGHLIGHTS
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Rs (thousand) 1HFY13 1HFY14 chg
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Income 364,247 607,865 67%
Operating expenses 54,915 83,882 53%
Net profit from operating activities 309,332 523,983 69%
Provision for WWF 6,187 10,480 69%
Net profit after taxation 303,145 513,503 69%
Earnings per certificate (Rs.)
With net realisation on re-measurement of investment 1.07 1.81
Without net realisation on re-measurement of investment 0.69 1.24
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Source: KSE notice
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