In June 2011 the CPI dipped by 0.76% on MoM basis reaching 13.13% YTD primarily due to lower than
expected decrease in the perishable item and high base effect. In order to persuade IMF to release the
tranche of $ 1.72bn, government is making all the efforts to manage CPI and other macroeconomic
indicators. One such effort was the tax collection of a whopping amount of PKR 155bn in the last week
of FY2010-2011. The inevitable widening of the trade deficit has been covered by the massive inflow of
remittance since March 2011.
On the External Side FDI dropped by 37% YoY to US$160mn in May-11, but is up 26% MoM. YTD, FDI
is down 29% YoY. Trade deficit for 10MFY11 stood at $9.39bn, down 8% as compared to 10MFY10.
The external inflow other then remittances remained strained as most of the international agencies have
delayed support till IMF issues a letter of comfort for Pakistan. Furthermore, the statement of US
Secretary of State to withdraw Military aid to Pakistan has also built negative sentiments in the
international market.
In later half of July 2011 IMF is scheduled to meet the government officials to monitor the progress on
the implementation of the “conditionalities” imposed by the stand by agreement and has also asked the
government to give clarification on the macroeconomic targets given in the budget of FY2011-2012. We
believe that the inflation numbers will not experience further increase even with more than probable
surge in fuel prices in the upcoming months as the high base effect will also play a vital role in keeping
inflation under control.
Going forward, in FY2011-2012 fiscal deficit will be a cause of concern for the government since the
imminent debt servicing and principle repayment will be too huge for the government’s revenue to
cover.
The money market during the month of June 2011 remained mostly mixed with discounting reported
couple of times and also money market witnessed the lowest levels of floor rate at 11%. However,
frequent intervention by SBP through OMOs stabilized money market where average overnight rates
were ranging between 12.50% to 13.50%. Moreover, in the T-bill auction dated June 16, 2011 SBP
given the cut-off yield of 13.48%, 13.73% and 13.90% in 3, 6 and 12 months respectively and
maintained the same stance in last T-bill auction dated June 30, 2011 of the FY-11 at the same rates.
The KSE – 100 started the year at 9,722 and closed the year at 12,496 up 28.53% on YTD basis
however, the performance of the index was skewed as majority of the index gains were provided by
NESTLE which is a thinly traded stock. On a MoM basis the index started at 12,123 and closed at
12,496 up 3.08%. The market rose during the month, even as Foreign Investors Portfolio Investment
(FIPI) witnessed a net outflow on monthly basis. According to the data provided by NCCPL, foreign
investors remained net sellers for the month of June too as foreigners bought shares worth PKR 4.58 Bn
and sold shares worth PKR 8.12 Bn thus resulting in net selling of PKR 3.54 Bn (USD 41.21 Mn) during
the month. On an YTD basis FIPI registered a decline of 50.63% as net FIPI clocked in at USD 280.12
Mn for this year compared to last year’s net FIPI of USD 567.56 Mn. Majority of the FIPI selling was
absorbed by local investors and institutions that re-entered the market in anticipation of removal of CGT
due to difficulty in understanding and implementation of CGT. However, the investors were dealt with a
blow as Budget and Finance Bill failed to mention anything regarding CGT. On the economic front
Foreign Direct Investment (FDI) continued its declining trend. High interest rates and weak currency can
be cited as some of the reasons for this abysmal performance. Going forward current account can come
under pressure due to drying of aid and increase in trade deficit on the back of decline in cotton prices
and increase in international oil prices. Political uncertainty and deteriorating law and order situation also
played its part as foreigners reduced their equity exposure. Foreign flows failed to materialize which
were contingent on the government implementing measures to document the economy, increase the tax
base and reduce the subsidy given to various sectors.
Going forward successful conclusion of Pakistan’s talks with IMF, upcoming result season, relief on
CGT and monetary easing can provide much needed impetus and liquidity to the market. We continue to
focus on growth stocks that provide stable dividend yield.
Jun ‘11FUND MANAGER’S REPORT
ECONOMIC OUTLOOK
MONEY MARKET REVIEW
EQUITY MARKET REVIEW
Performance Review FBGF started June at a NAV/unit of PKR 76.18 and closed the month at a NAV/unit of PKR 72.27, down 5.13% on a Month on Month (MoM) basis. In comparison
FBGF’s benchmark gave a return of 2% for the month of June thus outperforming the fund return. Comparing FBGF to its peer group, FBGF under performed the
average return of the peer group by 393 bps (basis point) as the average peer group return for the month was negative 1.20%. The average return of balanced
funds on Year to date (YTD) basis was 17.95% while FBGF yielded a return of 9.98% on YTD basis thus under performing the peer group on YTD basis. On the
asset allocation side exposure in equities was reduced to 39.12% from previous month’s level of 40.52%. Allocation in other asset classes was more or less
maintained at last month’s level.
Investment ObjectiveFBGF endeavors to provide investors with an opportunity to earn income and
long-term capital appreciation by investing in a large pool of funds
representing equity / non equity investments in a broad range of sectors and
financial instruments
Fund Info
rmation
Fund Type Open Ended
Category Balanced Scheme
Risk Profile Moderate
Launch Date 19-Apr-04
Custodian/Trustee CDC
Auditor Ernst & Young Ford Rhodes Sidat Hyder
Management Fee 2%
Front/Back end Load 2.25% (Front end Load)
Min Subscription PKR. 5,000
Benchmark* KSE100 Index / 6M KIBOR
Pricing Mechanism Forward
Dealing Days Monday-Friday
Cut-Off Timing 9am-5pm
AMC Rating AM2- (JCR-VIS)
NAV per Unit (PKR) 72.27
Net Assets (mn) 360.19
Leverage Nil
* weighted average of 6M KIBOR & percentage invested in equities
Jun'11 May '11
Fund
Retu
rns FY11 to Date 9.98 15.93
Month-on Month -5.13 -1.59
Benchmark (YTD) 20.84 18.43
Top 1
0 E
quity h
old
ings
(% o
f T
. A
ssets
)
Pakistan State Oil 9.03%
Bank of Khyber 7.79%
Pakistan Tobacco 5.42%
Engro Corporation 4.46%
Attock Petroleum 4.14%
Pakistan Oil Fields 3.43%
Pakistan Petroleum 2.83%
Hub Power Company 2.05%
Asset
Quality
(% o
f T
ota
l
Assets
) AA 35.59
AA- 0.01
D 6.62Investm
ent
Com
mitte
e Salman Haider Sheikh Chief Executive Officer
Shahid Usman Ojha Chief Financial Officer
Asad Iqbal Chief Investment Officer
Ayaz Mustafa Zuberi Fund Manager- Fixed Income
Mansoor Bughio Fund Manager- Fixed Income
Omar Ehtisham Anwar Fund Manager- Equity
Syed Qamar Abbas Head of Research
Non Compliance
Name of InstrumentRating
required
Existing
Rating
Type of
Instrument
Value of Investment
Before provision
Provision (If
any )
Value of
Investment
after provision
% of Net
Assets
% of Total
Assets
Telecard A- D TFC 24,267,128 - 24,267,128 6.74 6.62
Single Entry exposures
Pak Electron N/A N/A
Preference
Shares 37,490,000 - 37,490,000 10.41 10.23
Asset Allocation (% of Total Assets)
Ris
k-q
uants
Alpha -0.024%
Beta 0.8998
Sharpe -0.3339
Standard Deviation 0.657%
VaR 1.080%
R² 0.4194
Treynor -0.0387
Kurtosis 1.6373
Jun’11 May’11
Jun’11 May'11
Secto
r A
llocation
(% o
f T
. A
ssets
)
Oil & Gas 19.42 16.70
Banks 7.79 9.98
Tobacco 5.42 5.19
Chemicals 4.46 2.34
Electricity 2.05 6.30
Performance Review
The performance of Faysal Income and Growth Fund (FIGF) was superb during the month of June as it yielded 8.78% during the month as compared to its peer
group that earned -16.55% on average. Thus, FIGF surpassed its peer group by 25.33%. On year to date, FIGF also outperformed its peer group return by
14.26% as it yielded a return of 9.71% vs peer group average return of -4.55%.
FIGF started June at the NAV/unit of PKR 103.73 and closed the month at the NAV/unit of PKR 104.45. On the asset allocation side, our portfolio comprises of
21.30% in bank deposits, 28.79% in GoP Ijara Sukuks, 22.06% in TBills, 16.42% in placements with financial institutions, 5.70% in TFCs and 3.46% in
preference shares. Approximately 89% of the portfolio is invested in AA or better rated instruments. The strategy remains to lookout for opportunities with high
return potential while maintaining the fund's asset quality.
Investment ObjectiveFIGF seeks to provide investors optimal yield through diversifies portfolio
consisting of both long-term fixed instruments as well as short–term money
market instruments.
TF
C/S
UK
UK
Ho
ldin
gs
(a
s %
of T
ot a
sse
ts)
Kohat Cement 5.30%
Telecard 0.40%
Fund Info
rmation
Fund Type Open Ended
Category Aggressive Income Fund
Stability Rating A(f) (JCR-VIS)
Risk Profile Medium
Launch Date 10-Oct-05
Custodian/Trustee CDC
Auditor M.Yousuf Adil Saleem & Co.
Management Fee 1.50%
Front end Load 1%
Back end Load Nil
Min Subscription PKR. 5,000
Benchmark 90% 1 Yr KIBOR and 10% average of most recent
published 3month deposit rates of top 3 scheduled
Commercial Bank by deposit size
Pricing Mechanism Forward
Dealing Days Monday-Friday
Cut-Off Timing 9am-5pm
AMC Rating AM2-(JCRVIS)
NAV per Unit (PKR) 104.45
Net Assets (PKR mn) 604
Leverage Nil
Investm
ent
Com
mitte
e
Salman Haider Sheikh Chief Executive Officer
Shahid Usman Ojha Chief Financial Officer
Asad Iqbal Chief Investment Officer
Ayaz Mustafa Zuberi Fund Manager- Fixed Income
Mansoor Bughio Fund Manager- Fixed Income
Omar Ehtisham Anwar Fund Manager- Equity
Syed Qamar Abbas Head of Research
(CAGR Annualized % p.a) Jun '11 May'11
Fund
Retu
rns FY11 to Date 9.71 9.80
Month-on-Month 8.78 18.30
Benchmark (YTD) 13.30 13.27
Asset
Quality
(% o
f T
ota
l
Assets
)
Gov. Securities 50.79
AA+ 0.01
AA 37.66
AA- 0.01
D 0.40
NR 5.29
(Holding Period
Annualized % p.a) Jun '11 May'11
Fund
Retu
rns FY11 to Date 9.71 9.76
Month-on-Month 8.45 16.93
Benchmark (YTD) 13.3 13.27
Asset Allocation (% of Total Assets)
Ris
k-q
uants
Alpha -0.016%
Sharpe -1.5162
Standard Deviation 0.172%
VaR 0.283%
Skewness -2.0594
Sortino -0.7097
Kurtosis 41.2480
Weighted Average Days 133
FIGF Vs Benchmark
Jun’11 May’11
Pak Brunei Investment Co Ltd. N/A N/A Clean Placement 500,000 - 500,000 10.97% 10.84%
Maple leaf Cement BBB BB+ TFC 18931439 - 18931439 5.38% 5.32%
Performance Review The performance of Faysal Islamic Savings Growth Fund (FISGF) was excellent. On year to date, FISGF outperformed its benchmark return by 1.48% as it
yielded a return of 10.33% vs the benchmark return of 8.85%. During the month of June FISGF yielded 8.61% during the month as compared to the benchmark
return of 8.86%.
FISGF started June at NAV/unit of PKR 102.81 and closed the month at NAV/unit of PKR 103.51. On asset allocation side, the fund is highly liquid with our
portfolio comprised 36.06% in cash at bank and 61.84% in GoP Ijara Sukuk. Approximately 98% of the portfolio is invested in AA or better rated instruments. We
intend to continue our investment strategy to look out for Shariah Compliant opportunities with competitive return at acceptable risk levels.
Investment ObjectiveFISGF seeks to provide maximum possible preservation of capital and
a reasonable rate of return via investing in Shariah Complaint money
market and debt securities having good credit quality rating and
liquidity
Fund Info
rmation
Fund Type Open Ended
Category Islamic Income scheme
Risk Profile Low
Stability Rating A+(f) (JCRVIS)
Launch Date 14-June-10
Custodian/Trustee CDC
Auditor Ernst & Young Ford Rhodes Sidat Hyder
Management Fee 1.50%
Front end Load Nil
Back end load Nil
Min Subscription PKR. 5,000
Benchmark Average 6M deposit rate of 3 Islamic Banks
Pricing Mechanism Forward
Dealing Days Monday-Friday
Cut-Off Timing 9am-5pm
AMC Rating AM2-(JCRVIS)
NAV per Unit (PKR) 103.51
Net Assets (PKR mn) 295.40
Leverage Nil
Ris
k-q
uants
Alpha 0.014%
Sharpe -5.9242
Standard Deviation 0.037%
VaR 0.062%
Skewness 1.6397
Sortino -1.9064
Kurtosis 21.0471
Weighted Average Days 89
Investm
ent C
om
mitte
e
Salman Haider Sheikh Chief Executive Officer
Shahid Usman Ojha Chief Financial Officer
Asad Iqbal Chief Investment Officer
Ayaz Mustafa Zuberi Fund Manager- Fixed Income
Mansoor Bughio Fund Manager- Fixed Income
Omar Ehtisham Anwar Fund Manager- Equity
Syed Qamar Abbas Head of Research
(CAGR Annualized % p.a) Jun '11 May'11
Fund
Retu
rns FY11 to Date 10.33 10.48
Month-on-Month 8.61 11.94
Benchmark (YTD) 8.85 8.85
Asset
Quality
(% o
f T
ota
l A
ssets
)
Government Securities 61.84
AAA 0.22
AA+ 0.003
AA 35.81
A 0.02
(Holding Period
Annualized % p.a) Jun '11 May'11
Fund
Retu
rns FY11 to Date 10.33 10.44
Month-on-Month 8.23 11.33
Benchmark (YTD) 8.85 8.85
Asset Allocation (% of Total Assets)
Jun11 May’11
FISGF Vs Benchmark
Performance Review The performance of Faysal Money Market Fund (FMMF) was impressive during the month of June 2011 as the fund yielded MoM return of 11.59% as compared
to its benchmark return of 10.26% hence beating it by over 133 bps. While on YTD basis your fund yielded 11.48% against the YTD bench mark of 10.18% up
by 130 bps. However, on asset allocation side, the fund is highly liquid with our portfolio comprised almost 54.95.5% of T-bill, 17.10% of TRD 27.07% cash in AA
rated and above banks. We will continue with our investment strategy keeping the interest rate risk at lowest possible levels while ensuring highest credit quality
within our portfolio and tap any short term opportunity in terms of capital gains in the money market to pass on competitive and consistent returns to our unit
holders.
Investment ObjectiveFMMF seeks to provide stable and competitive returns in line with the money
markets exhibiting low volatility consistent with capital preservation by
constructing a liquid portfolio of low risk short term investments yielding
competitive returns.
Fund Info
rmation
Fund Type Open Ended
Category Money Market Scheme
Risk Profile Low
Stability Rating AA+(f) (JCR-VIS)
Launch Date 13 December 2010
Custodian/Trustee CDC
Auditor Ernst & Young Ford Rhodes Sidat Hyder
Management Fee 10% of Gross or minimum 1.25% of Net Assets
Front end Load Nil
Back end load Nil
Min Subscription PKR. 5,000
Benchmark 50% 3 months T-Bills and 50% Average 3
months deposit rate AA rated and above banks
Pricing Mechanism Backward
Dealing Days Monday-Friday
Cut-Off Timing 9am-5pm
AMC Rating AM2-(JCRVIS)
NAV per Unit (PKR) 103.68
Net Assets (PKR mn) 579.74
Leverage Nil
Ris
k-q
uants
Alpha 0.001%
Sharpe -5.7581
Standard Deviation 0.026%
VaR 0.043%
Skewness 1.5784
Sortino N/A
Kurtosis 2.1186
Weighted Average Days 50
Inve
stm
en
t C
om
mitte
e Salman Haider Sheikh Chief Executive Officer
Shahid Usman Ojha Chief Financial Officer
Asad Iqbal Chief Investment Officer
Ayaz Mustafa Zuberi Fund Manager- Fixed Income
Mansoor Bughio Fund Manager- Fixed Income
Omar Ehtisham Anwar Fund Manager- Equity
Syed Qamar Abbas Head of Research
(CAGR Annualized % p.a) Jun '11 May '11
Fund R
etu
rns
FY11 to Date 11.48 11.47
Month-on-Month 11.59 11.17
Benchmark (YTD) 10.18 10.17
Asset Q
uality
(% o
f T
ota
l A
ssets
)
Government Securities 54.96
AA+ 0.002
AA 43.98
A 0.00
(Holding Period
Annualized % p.a) Jun '11 May'11
Fund R
etu
rns
FY11 to Date 11.2 11.13
Month-on-Month 11.01 10.64
Benchmark (YTD) 10.18 10.17
Asset Allocation (% of Total Assets)
FMMF Vs Benchmark
Jun’11 May’11