In spite of Pakistan’s ongoing economic and security challenges, the strength of the country’s capital market was highlighted when Golden Arrow Selected Stocks Fund was ranked fifth in the world on the Thomson Reuters Lipper Global 100 Index in January this year. Acquired by AKD Investment Management Ltd. in the year 2004, Golden Arrow Selected Stocks Fund generated a return of 105.29% in 2012.
“The fund has performed, so nothing could be better for us,” says Aqeel Karim Dhedhi, Chairman AKD Group. AKD Securities has enjoyed unparalleled success at the Karachi Stock Exchange for decades while the AKD Group has emerged as a formidable business empire encompassing financial services, real estate and energy.
A leading pioneer of Pakistan’s capital market, Aqeel Dhedhi emphasises the lucrative returns that can be realised through investing in equities, “There is a lot of money in equities and it is open for everyone to invest in. I have always believed that the return on the equity market is better than fixed income. The market may fluctuate but at the end of the day equities are beneficial,” says Dhedhi.
Through a clear and dedicated investment strategy targeting well-managed companies with a high intrinsic value, Golden Arrow’s focus on growth-oriented stocks has reaped immense dividends. It is an investment philosophy which the fund will stay committed to going forward.
In fact, Dhedhi strongly recommends investing in stocks which have a high growth potential, “Often fund managers want to invest in secure stocks but I also say that we should buy stocks which are growth-oriented. If they remain invested, there will be definite returns.”
Though Pakistan has been facing unprecedented challenges over the years with devastating floods and economic fragility, Golden Arrow’s success is a testament to the resilience of Pakistan’s capital market.
The results of the Thomson Reuters Lipper rankings indicate that in the wake of the global financial crisis, economic recovery has been led by the Asian markets, particularly emerging and frontier markets like Pakistan.
With a flourishing rural economy and an adjustment in Pakistan’s interest rates, Dhedhi remains optimistic about Pakistan’s economic outlook, “Pakistan has now become self-sufficient in wheat, sugarcane and rice yields have improved, increasing the potential for exports. The current petroleum policy is good so oil and gas shares have performed well. Things are improving; telecoms have revived, pharmaceuticals, urea and cement are all performing well.”
CEO AKD Investment Management Limited Imran Motiwala explains the investment strategy, “Our investment philosophy is essentially based on: we take a macro outlook on the economy and once we have that in place we identify sectors within our outlook of which ones will perform and which ones are not expected to perform as much and then within those sectors we select specific stocks. It is essentially a top to bottom approach. We are more than pleased that we were able to achieve this position for our country and our industry as well. It shows the talent we have in Pakistan and it is a mark of our potential in this country.”
He discusses how despite the security challenges, Pakistan remains an attractive investment destination, “When we opened up our doors to foreign investors we were very generous and it was a very friendly environment. It is still a very friendly environment for foreign investors where they are able to invest in the stock market, there are no requirements or major requisites, they are able to take all their profits and dividends which is a friendly foreign investor policy.”
In today’s troubled economic times, the outstanding performance of Golden Arrow highlights the potential of Pakistan’s capital market and that a sound investment strategy in emerging markets like Pakistan can reap immense rewards.