The financial results of Abamco-Picic ICP lots showed a balanced performance and both lots kept their heads above troubled waters during the first half of the current fiscal year despite the fact that local bourses during the said period received intense selling pressure.
The aggregate profitability of the Abamco Lot-A fund during July-December declined to Rs 598 million as compared to the cumulative net income of Rs 715 million of the same period of previous year.
However, if the unrealised gains on investment are excluded from the Abamco lot, the net profitability of the fund shows an upsurge of 52 percent, period-on-period basis.
During the discussed period, the lot earned a net gain of Rs 89 million from the transactions in marketable securities which was Rs 27 million during 1H-FY03, showing a 3.3 times increase.
However, increase in expenditures incurred mainly from high management fee, squeezed the net margins of the lot to a certain extent.
Gauging the performance of Lot -A, the 8 th ICP, 3rd ICP and 12th ICP were the funds whose profitability in the lot correspondingly surged by 27 percent, 9 percent and 2 percent respectively.
During 1H-FY04, 25 th ICP held the top position on profitability basis and registered a profit after tax of Rs 127 million, but it was Rs 55 million lower than that of its corresponding period last fiscal.
"If we look at the percentage increase in the profit after tax without unrealised gains on investment of Abamco ICPs, the 21st ICP heads the chart where, during 1H-FY04, the income excluding unrealised gains on investment of the fund swelled by almost 16 times,'' said a report of Capital One Equities prepared by Humaira Zaheer.
Coming on to Lot-B managed by Picic, Lot-B enjoyed an edge over the Lot-A in terms of net profitability.
The total net income (including the unrealised gains) stood at Rs 2 billion. However, this was a decline of 8 percent when compared to a sum of Rs 2.23 billion during the same period last fiscal year.
Excluding unrealised gains from Lot-B, the fund was able to maintain its upward momentum by registering a profit after tax of Rs 754 million, a 237 percent increase period on period basis.
This increase can highly be attributed to a well-diversified portfolio mix by the Lot- B mutual funds, which resulted in high gains for the fund as a whole.
During 1H-FY04, 7th ICP, 17th ICP, 22nd ICP and 24th ICP mutual funds reported corresponding increase in their earning base by 11 percent, 10 percent, 22 percent and 18 percent while the remaining ten funds reported a decline in the profitability during the discussed period.
The top performer on profitability terms was ICP-SEMF, which registered a net profitability figure of Rs 1.35 billion for 1H-FY04 as compared to a net income of Rs 1.49 billion posted during the same period last year, a drop of nearly 9 percent.
However, if the unrealised gain on investment is excluded from the net income, the fund earned a handsome amount of Rs 368 million that was previously Rs 142 million, showing a 159 percent increase period on period basis.
As for the forthcoming years, Humaira believed that Lot -A & B, under the management rights of Abamco and Picic are likely to flourish providing decent returns to its shareholders as a whole.
As said repeatedly, the implementation of IAS-39 would benefit both the entities in terms of strong income base in the long run.
The recently launched Abamco Stock Market Fund is likely to be one of the key drivers of the aggregate income for the Abamco lot.
Furthermore, the induction of ICP-SEMF in the Picic wallet will continue to contribute en masse towards a strong operating and financial performance, mutually for the company as well as for the fund.
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