Hedge-Fund Manager Duet Mena to Increase Pakistan Stock HoldingsFaseeh Mangi
Duet Mena Ltd., a manager of private-equity and hedge funds, plans to increase its Pakistan equity holdings as foreign selling pushes the country’s benchmark stock index toward its worst performance in seven months.
The money manager’s Duet EM Frontier Fund will probably boost its exposure to Pakistan stocks to as much as 18 percent from 11 to 12 percent, Hedi Ben Mlouka, chief executive officer of Duet Mena, said in a March 18 phone interview from Dubai. He didn’t give a timeframe for the move. Duet Mena is part of the Duet Group, which has about $6 billion in assets.
Pakistan’s fundamentals are improving and “offer a very attractive opportunity,” said Mlouka, who headed Merrill Lynch & Co.’s equity and structured-product marketing for Central and Eastern Europe, the Middle East and Africa, before he was hired by the Duet Group in 2008. “Most investors even in the frontier space shy away due to negative headline news.”
The benchmark KSE 100 index’s losses this month come even as an increase in consumer spending and loans from the International Monetary Fund help lift Pakistan’s economic growth toward a seven-year high. The nation’s central bank cut its benchmark interest rate to the lowest in almost 13 years on Saturday, as lower oil prices slowed inflation.
Mlouka said the money manager plans to invest in the nation’s independent power producers as he expects demand for electricity to outstrip supply for a few years. Under the terms of the IMF loan, Pakistan plans to privatize loss-making companies and boost power generation capacity.
“Not all promised reforms will take place, but a marginal improvement will make a very big difference and make the country an attractive investor destination,” Mlouka said.