KARACHI (December 31 2006): Draw for allocation of shares of Arif Habib Limited (AHL) to the general public was held at a local hotel on Saturday. This became necessary due to the overwhelming response and over-subscription to the Offer for Sale of 5 million shares--out of a total 20 million shares--by AHL's holding company, Arif Habib Securities Limited (AHSL).

The offer price was Rs 100 per share, including a premium of Rs 90 per share. Accordingly, the total amount offered for subscription was Rs 500 million. Against this offer, valid applications of over Rs 1.32 billion were received, representing 264 percent over-subscription. Given the subscription pattern, only the applications for minimum subscription (500 shares) were included in the draw according to the applicable law.

The ceremony was attended by a wide cross-section of stakeholders, subscribing public, representatives of Karachi Stock Exchange (KSE), underwriters to the issue, sponsors and management of the Arif Habib Group and AHL. M A Lodhi, Managing Director, KSE, was also present.

The overwhelming response to the Offer for Sale was not just in terms of the amount of subscription received but also in terms of the geographic spread, where 52 cities and towns were represented from all four provinces of the country and Azad Jammu & Kashmir, indicating strong brand recognition of the Group and investor confidence in such quality issues. Remote, small population centres like Kotli (AJK), Layyah, Bannu, Vehari, Tando Adam, Kasur, Haripur, Shahdadpur etc were duly represented.

A broad investor base comprising over 9,500 minimum-size applicants was seen by AHL not only as an indicator of its strong brand recognition and the public trust in the franchise value of the Group, but also as a reminder of the higher discipline and governance responsibility thus imposed on the sponsors and the management. The sponsors and the management reiterated their commitment to this high public expectation and to creating shareholder value for the investor that does so much to facilitate the development of the country's capital markets and the overall economy.

The chief guest, KSE Chairman Z A Khan, complimented the Arif Habib Group on the success and for its role in the development of the country's economy. He agreed to take up some of the issues that seemingly have a negative impact on the market at the appropriate forums. These included rationalisation of the taxation regime including extension of the capital gains tax beyond June 2007, the Capital Value Tax on the purchase of shares, review of the Capital Issue Rules and the case for incentive-based differentiation between publicly listed and private companies to attract quality new listings.

The KSE's role in promoting good corporate governance and offerings by quality issuers was appreciated, as was the ultimate objective of providing a larger and better-quality investment opportunity-set to the investing public.

The result of the draw was handed over to KSE and to the bankers to the issue, in accordance with the regulations. The bankers to the issue have been instructed to immediately refund the subscription amount of the unsuccessful applicants. Likewise, the registrar has been instructed to issue shares to the successful applicants in line with their indicated preferences within the stipulated timeframe.

Copyright Business Recorder, 2006