The Equity Market Opportunity Fund (EMOF)
July 11, 2008The Securities and Exchange Commission of Pakistan (SECP) has issued tentative regulations for Equity Market Opportunity Fund (EMOF) worth Rs50 billion which will be injected into the fast falling capital market to stabilise it in bad days…Next meeting on the fund formation is scheduled to be held on July 16th. The tentative regulations were made public following SECP and KSE meeting held here on Thursday with financial institutions, which are the only eligible investors to pool their funds in EMOF.
Next meeting on the fund formation is scheduled to be held on July 16. The tentative regulations were made public following SECP and KSE meeting held here on Thursday with financial institutions, which are the only eligible investors to pool their funds in EMOF.National Investment Trust Limited (NITL) will be given the responsibility to run this fund, while financial institutions ie banks and Development Financial Institutions (DFIs), state-owned institutions and semi-government companies would be its only eligible members.
If an agreement is inked between the SECP and the likely members of this fund, then this fund would be invested in the KSE 30-index stocks that are eligible for CFS and CFS MK-II. Fund allocation will be according to the weight of each eligible scrip as a percentage of total CFS value as of July 08, 2008. Listed securities of brokerage houses and their holding companies will not be eligible securities for investment.
The EMOF shall be utilised as 30 per cent of funds will be made available on Day one; 30 per cent on day two; 30 per cent on day three and 10 per cent of funds will be made available on Day four. Any unutilized funds shall continue to be made available till the fifth trading day.After phase one, if funds are still available, the EMOF will review its investment strategy and may reenter the market.On the other hand, EMOF shall divest its holdings when the share prices of any particular scrip exceed 20 per cent of their weighted average of last six months… The News
