INVESTMENT COMMITTEE CUTT-OFF TIMINGS OF FUNDS
PAKISTAN ECONOMIC UPDATES
Disclaimer:
This publication is for informational purposes only and nothing herein should be construed as a solicitation, recommendation or an offer to buy or sell any
fund. All investments in mutual funds are subject to market risks. The NAV based prices of units and any dividends/returns thereon are dependant on
forces and factors affecting the capital markets. These may go up or down based on market conditions. Past performance is not necessarily indicative of
future results.
DAWOOD CAPITAL MANAGEMENT LIMITED1500A Saima Trade Towers, I.I. Chundrigar Road, Karachi-74700, Pakistan
UAN: 111-DAWOOD (111-329-663) PABX: (92 21) 32271874 x 227 Fax: (92 21) 32271912
Email: [email protected] URL: www.edawood.com
Economic OutlookThe Pakistani markets are still assessing the scale of damages inflicted by the August floods, as well as their near term impact on the
economy. The floods are expected to have an immediate fiscal impact on the government’s budgetary priorities.
News reports suggest that a revised budget with a special flood tax, diminished development spending targets and a tight fiscal rein will
be offered to provide some fiscal stability, until a clearer picture of foreign flows emerges. However the excessive government borrowing
will tend to hike in inflationary pressure in near future.
Market PerformanceVolatile KSE-100 index gained 291 points to 10013 points (+3%) during the third quarter despite lower volumes (average daily volume of
62mn). Factors keeping investors sidelined included; 1) 100bps increase in Discount Rate, 2) Realization of the magnitude of floods and
resulting damages, 3) Uncertain macroeconomic environment and 4) Delay in leverage product. However, towards the end of the quarter
market activity picked up thanks to approval of MTS concept paper, helping KSE‐100 index to recover from July’s clobbering.
Nevertheless, overall perception of weakening macroeconomic fundamentals and political noise could continue going forward. In this
scenario, any progress pertaining to introduction of MTS or an exciting earnings season could help rejuvenate investor interest.
Debt Market ReviewMedium-term impact of floods is still not very clear on the economy and will be further clear in the up-coming months; however, the trend
is still showing the inclination towards further increase in the interest rates in near future. This coupled with persistent Government
borrowings indicates that T-Bills rates may remain high or creep up further.
As a result of prevailing economic conditions the overall debt market remained on the depressed side with substantial downward
revaluation of debt security prices during the first quarter of FY 10~11. However the successful restructuring of previously defaulting debt
securities in cement sector, showed a positive development towards market recovery.
Money Market ReviewThe money market during the quarter remained mostly liquid with the overnight rates ranging from 10.50% to 11.50%. The T-bill for 3, 6
and 12 months were trading between the ranges of 12.45%-12.55%, 12.60%-12.70% and 12.75%-12.85% respectively. However, hike in
the Discount Rate resulted in spike on T-bill yields as witnessed by 12 months T-bill traded above 12.85% in the market.
During the period, SBP continues to monitor the market liquidity and kept its focus on interest rate volatility as reflected by Open Market
Operations. Whereas the Money Market hit the floor rate many times due to extra liquidity available in the system.
DAWOOD CAPITAL MANAGEMENT LIMITED
Fund Manager's Report - Septembert 2010
Muhammad Saleem Munshi Chief Investment Officer
Muhammad Ahmed Fund Manager
Mustansir Shabbar Member
Muhammad Aamir Siddiqui Secretary
* Limit Breach
FUND STATISTICS PERFORMANCE STATISTICS
DMMF TOP TEN DEBT SECURITIES FUND MANAGER'S COMMENTS
During the month of Septemeber, DMMF again
witnessed a healthy positive return of 17.02% pa.
This was due to reversals and capital gains against
defaulting debt instruments that have now been
paying their due amounts making DMMF an
extremely attractive investments for investors
looking to take the advantage of the reversals and
capital gains. DMMF will continue to progress in the
same manner in up coming months as well.
DAWOOD MONEY MARKET FUND
Fund Manager's Report - September 2010
INVESTMENT OBJECTIVE
To preserve the investor’s capital w hile providing a return
greater than that offered by other investments of similar risk
profile through investments in a portfolio of money market
instruments.
Name of Fund Dawood Money Market Fund
Structure Open End
Industry Category Fixed Income
Benchmark Avg. 6 Month KIBOR (Subject to SECP Approval)
Trustee & Custodian Bank AL Habib
Auditor M. Yousuf Adil Saleem & Co.
Registrar Gangjees Registrar Services
Legal Advisor Bawaney & Partners
Launch Date 19-May-2003
Listing KSE
Duration Perpetual
Management Fee 1.00% per annum
Sales Load 1% Front End
Pricing Mechanism Forward
Leverage Nill
Risk Profile Medium
AMC Rating AM4+
Stability Rating Not Rated
Returns Aug-10 Sep-10
DMMF 18.70% 17.02%
Benchmark 12.82% 12.91%
Alpha 5.88% 4.11%
1 Month 3 Months 6 Months YTD
17.02% 23.56% 35.28% 23.56%
HISTORIC RETURNS
Asset Mix Aug-2010 Sep-2010
Placements 12.86% 12.75%
Debt Securities 68.71% 64.07%
Govt. Securities 6.31% 6.27%
Cash & Eq. 6.72% 13.37%
Others 5.41% 3.54%
Placements, 12.86%
Debt Securities,
68.71%
Govt. Securities,
6.31%
Cash & Eq., 6.72%
Others,4.29%
Aug-2010
Placements, 12.75%
Debt Securities,
64.07%
Govt. Securities,
6.27%
Cash & Eq., 13.37%
Others,4.29%
Sep-2010
Credit Quality Aug-2010 Sep-2010
A 24.95% 26.27%
A- 1.86% 0.00%
A+ 13.30% 6.34%
AA 14.14% 14.10%
BBB 8.56% 0.00%
Less Than BBB 0.00% 5.74%
Unrated 5.90% 11.62%
0.00% 7.00% 14.00% 21.00% 28.00%
A
A-
A+
AA
BBB
Less Than BBB
Unrated
26.27%
0.00%
6.34%
14.10%
0.00%
5.74%
11.62%
Sep
-201
0
Investee Company Type %
Engro Fertilizer Limited TFC 14.27%
Optimus Limited TFC 11.55%
Trust Investment Bank Limited TFC 8.86%
Escort Investment Bank Limited TFC 6.42%
Kohat Cement Company Limited SUKUK 5.92%
Invest Capital and Investment Bank Ltd. TFC 5.81%
NIB Bank Limited TFC 4.88%
Invest Capital and Investment Bank Ltd. TFC 4.14%
Grays Leasing Company Limited TFC 1.69%
Trakker Pakistan Limited TFC 1.28%
Net Assets PKR 387.52 Million
NAV PKR 69.0216
Wt. Avg. Time To Maturity 3.14 Years
Standard Deviation 0.72%
Sharpe Ratio 1.06
Information Ratio 1.05
VAMI 1.05
Name of Investment Type Value before
provision
Provision
(if any)
Value after
provision
% Net
Assets
% Gross
Assets
Engro Fertilizer Limited * TFC 55,303,042 - 55,303,042 14.27% 14.10%
Optimus Limited * TFC 44,760,159 - 44,760,159 11.55% 11.41%
Kohat Cement Company Limited SUKUK 30,598,050 7,649,513 22,948,538 5.92% 5.85%
Dewan Cement Limited TFC 150,000,000 150,000,000 - 0.00% 0.00%
New Allied Electronics Industries Limited TFC 28,283,312 28,283,312 - 0.00% 0.00%
Invest Capital and Investment Bank Ltd. TFC 22,500,000 - 22,500,000 5.81% 5.74%
Invest Capital and Investment Bank Ltd. TFC 16,044,131 - 16,044,131 4.14% 4.09%
Grays Leasing Company Limited TFC 6,562,500 - 6,562,500 1.69% 1.67%
Invest Capital Investment Bank Ltd. * COM 50,000,000 - 50,000,000 12.90% 12.75%
Saudi Pak Leasing Co. Ltd COI 99,866,669 99,866,669 - 0.00% 0.00%
T o tal 503,917,863 285,799,494 218,118,369 56.29% 55.62%
DETAILS OF NON COMPLIANT INVESTMENT
* Limit Breach
FUND STATISTICS PERFORMANCE STATISTICS
DIF TOP TEN DEBT SECURITIES FUND MANAGER'S COMMENTS
During the month of September, DIF NAV increased by 17.03%
as compared to its benchmark which was increased by 1.10%.
Thus DIF has outperformed its benchmark by 15.93%. This was
due to reversals and capital gains against non performing assets
that have now been paying their due amounts making DIF an
extremely attractive investments for investors looking to take
advantage of the reversals and capital gains.
DAWOOD ISLAMIC FUND
Fund Manager's Report - September 2010
Musharika, 17.08%
Debt Securities,
37.43%
Cash & Eq., 27.92%
Equities, 13.17%
Others,4.29%
Au
g-2
01
0
INVESTMENT OBJECTIVE
To provide Riba-Free "Halal M unafa!" to investors by
investing maximum 25% of net assets in equities, w hile the high
percentage of non-equity income provides stability.
Equity Allocation Jul-2010 Aug-2010
Oil & Gas 10.89% 9.79%
Pharma & Bio Tech 2.22% 1.90%
Chemicals 1.39% 1.35%
Telecom 0.00% 0.13%
Name of Fund Dawood Islamic Fund
Structure Open End
Industry Category Islamic Asset Allocation
Trustee & Custodian CDC Pakistan Limited
Auditor M. Yousuf Adil Saleem & Co.
Registrar Gangjees Registrar Services
Legal Advisor Bawaney & Partners
Launch Date 14-Jul-2007
Listing KSE
Duration Perpetual
Management Fee 1.50% per annum
Sales Load 1.50% Front End
Pricing Mechanism Forward
Leverage Nill
Risk Profile Medium
AMC Rating AM4+
Benchmark 25% KMI-30 + 75% Savings Rate(Subject to SECP Apprval)
Shariah Advisors Prof. Mufti Munib-ur-Rehman
Mufti Syed Sabir Hussain
Mufti Syed Zahid
1 Month 3 Months 6 Months YTD
17.03% 17.85% 30.39% 17.85%
HISTORIC RETURNS
Returns Aug-2010 Sep-2010
DIF -1.05% 17.03%
Benchmark -0.89% 1.10%
Alpha -0.16% 15.93%
Asset Mix Aug-2010 Sep-2010
Musharika 16.88% 14.87%
Debt Securities 36.99% 39.75%
Cash & Eq. 27.59% 29.38%
Equities 13.01% 11.48%
Others 5.53% 4.52%
Musharika, 14.87%
Debt Securities,
39.75%
Cash & Eq., 29.38%
Equities, 11.48%
Others,4.29%
Se
p-2
010
Credit Quality Aug-2010 Sep-2010
AA 0.00% 10.07%
AA- 11.41% 0.00%
A- 9.70% 7.01%
A+ 8.26% 6.61%
Less Than A- 1.62% 10.77%
Unrated 6.01% 5.30%
0.00% 3.00% 6.00% 9.00% 12.00%
AA
A-
A+
Less Than A-
Unrated
10.07%
7.01%
6.61%
10.77%
5.30%
Sep
-201
0
Oil & Gas, 9.67%
Pharma & Bio Tech, 1.88%
Chemicals, 1.34%
Telecom, 0.12%
Au
g-20
10 Oil & Gas, 10.04%
Pharma & Bio Tech, 1.84%
Chemicals, 1.29%
Sep
-201
0
Investee Company Type %
Maple Leaf Cement Factory Limited SUKUK 13.49%
Engro Fertilizer Limited SUKUK 12.61%
Shahmurad Sugar Mills Limited SUKUK 8.78%
Pak Elektron Limited SUKUK 8.28%
Kohat Cement Company Limited SUKUK 6.64%
Total 49.81%
Net Assets PKR 272.65 Million
NAV PKR 116.6079
Wt. Avg. Time To Maturity 4.85 Years
Standard Deviation 9.73%
Sharpe Ratio 0.50
Information Ratio 0.52
Sortino Ratio 8.02
VAMI 1.18
Name of Investment Type Value before
provision
Provision
(if any)
Value after
provision
% of Net
Assets
% Gross
AssetsM aple Leaf Cement Factory Limited SUKUK 48,167,561 11,376,953 36,790,608 13.49% 10.77%
Kohat Cement Company Limited SUKUK 24,150,000 6,037,500 18,112,500 6.64% 5.30%
New Allied Electronics Industries Limited SUKUK 5,027,500 5,027,500 - 0.00% 0.00%
B.R.R. Guardian M odaraba COM 1,119,495 335,849 783,646 0.29% 0.23%
Invest Capital Investment Bank Ltd. * COM 50,000,000 - 50,000,000 18.34% 14.64%
T o tal 128,464,556 22,777,802 105,686,754 38.76% 30.94%
DETAILS OF NON COMPLIANT INVESTMENT