Annual report 2014-15: asset size of lending NBFCs up by Rs 63 billion in one year: SECP

The asset size of lending Non-Banking Financial Companies (NBFCs) increased by Rs 63 billion or 1.3 times from Rs 48 billion as of June 30, 2014 to Rs 111 billion as of June 30, 2015. The annual report (2014-15) issued by the SECP here on Saturday revealed that the asset size of lending NBFCs continued their upward trend for a second year in a row. The asset size of lending NBFCs increased by Rs 63 billion or 1.3 times from Rs 48 billion as of June 30, 2014 to Rs 111 billion as of June 30, 2015.
The increase is attributed to increase in asset size of leasing companies which increased by Rs 4 billion or 11% from Rs 36 billion as of June 30, 2014 to Rs 40 billion as of June 30, 2015 and issuance of licence to one new investment finance company, ie Pakistan Development Fund with the paid-up capital of Rs 60 billion. The SECP said that the total asset size of NBF sector as of June 30, 2015 was Rs 797 billion.
The SECP said that the mutual funds provide investors with professionally managed diversified portfolios, adequate disclosure and reasonable liquidity. The mutual fund industry continued to exhibit positive growth during the year 2014-15. As of June 30, 2015, the total assets managed by 23 Asset Management Companies (AMCS) in 172 mutual funds totalled to Rs 492 billion against Rs 452 billion as of June 30, 2014, representing a rise of 8.8 percent. Equity funds dominated the asset under management (AUM) representing 40.29 percent share of the industry, followed by fixed income funds with 26.36 percent, Money Market Funds with 19.83 percent and Fund of funds 5.93 percent share. Handsome returns by the stock market, low interest rate environment coupled with participation of retail investors in the stock market through CPPI based funds contributed significantly to the increase in market share of equity funds.
Net assets of the mutual fund industry aggregated to Rs 510.50 billion on May 30, 2015, which dropped to Rs 442.18 billion by June 30, 2015. The main factor, which contributed towards a net redemption of Rs 68.31 billion, was change in rate of tax on capital gain of income and money market fund for corporate investors from July 1, 2015. The redemptions were primarily in the category of income and money market fund, the SECP said.
During the current year, assets of pension funds have shown remarkable progress and increased from Rs 8.31 billion as of June 30, 2014 to Rs 13.585 billion on June 30, 2015. At present, 17 pension funds are operating in the market, being managed by 9 pension fund managers.
During the year, one new AMC were registered as a pension fund manager (PFM) under the VPS Rules, 2005. The total number of PFMs now stands at 9. The number of pension funds increased to 17 with the launch of 4 new pension funds during the year. It is expected that VPS will gain a strong foothold in Pakistan's financial market. The Voluntary pension schemes provide an advantage to both the individual and the employer who can invest in a long term savings product which is regulated and adequate checks and balances have been incorporated in the regulatory framework for investor protection.