SECP, KSE fail to manage proposed Rs50b EMOF

KARACHI - Securities and Exchange Commission of Pakistan (SECP) and Karachi Stock Exchange (KSE) have not succeeded to manage the proposed Rs50 billion Equity Market Opportunity Fund (EMOF), as the financial institutions have shown willingness to pour in between Rs10 to Rs5 billion into the equity fund and likely to be launched on coming Monday, The Nation learnt.

Sources said that contribution of the State Life Insurance Company in the Rs10 to Rs5 billion equity fund will be higher than among other institutions including EOBI, NIT and Faisal Bank that will invest in the fund.

Brokers said that cutback in the planned Rs50 billion equity fund will not able to bring relief to the stock market because stock markets have already witnessed massive decline and need huge liquidity to bring markets out of current turmoil.

"Mutual fund industry is the main hurdle behind the failure of the proposed Rs50 billion equity fund because mutual industry doesn't want to see any other fund in the presence of it, which may pave the way for stabilizing the stock markets," a broker said.

"Government institutions are already investing in the stock markets and they were always present in the stock markets, no matter what the behaviour of the markets, so they have a good excuse to not participating extraordinarily in the proposed Rs50 billion equity market fund," broker added.

According to the press note issued by KSE on Wednesday said that SECP & KSE met with Financial Institutions to discuss "the Equity Market Opportunity Fund".

Initial financial commitments were received and the participants are meeting to finalize the structure and mechanics of the fund. Launch date will be intimated in due course.