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Friday, March 23rd, 2018

JCR-VIS Upgrades Management Quality Rating of ABL Asset Management Company Limited

by December 29, 2017 General

Karachi, December 29, 2017 (PPI-OT):JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has upgraded the Management Quality Rating of ABL Asset Management Company Limited (ABL AMC) to ‘AM2++’ (AM-Two-Double Plus) from ‘AM2+’ (AM Two Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 30, 2016.

The rating incorporates the company’s increasing market share, improving funds’ performance and strengthening of investment management practices on a timeline basis. The rating also takes into account ABL AMC’s effective corporate governance framework, professional management team, and balanced board composition. Strong support from the primary sponsor, Allied Bank Limited (ABL), is also a key rating factor; the management intends more effective engagement with the parent bank for the sale of mutual funds, going forward. Moreover, the company’s continuing focus to expand sales force and enhance alternate delivery channels is also taken into consideration.

Market share (adjusted for fund of funds) increased to 5.7% (Jun’16: 5.5%) by end-Jun’17. AUMs (adjusted for fund of funds) increased to Rs.42.3b (Jun’17: Rs.35.2b; Jun’16: Rs.25.5b) by end-Nov’17 with about 7% market share. Although quantum of retail AUMs increased on a timeline basis, however its proportion in total AUMs has remained largely stagnant. Going forward, the management has embarked upon improving granularity by enhancing proportion of retail clientele. In this regard, the management has segregated the function of Alternate Delivery Channels (ADC), previously a part of business development, and has hired a separate senior resource for the said purpose

During the period under review, ABL AMC launched an additional fund namely Islamic Dedicated Stock Fund, thereby taking total tally of fund offerings to 11 funds. The senior management underwent considerable changes; number of vacant positions were filled including chief investment officer and fund managers. The head of risk has been inducted as a permanent voting member in the investment committee. Overall scope and functioning of the different control functions is considered adequate. Moreover, scope of employee trading policy has been enhanced to cover indirect trading by employees.

During FY17, performance of most funds featured in first and second quartiles. Peer ranking of ABL Cash Fund and ABL Islamic Stock Fund has witnessed noticeable improvement in the ongoing year. As one of the key rating parameters, JCR-VIS will continue to monitor the performance of assets under management across different asset classes over time.

For more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873