Karachi, December 28, 2018 (PPI-OT): JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has maintained the Management Quality Rating (MQR) of HBL Asset Management Limited (HBL AML) at ‘AM2+’ (AM-Two Plus). Outlook on the assigned rating has been revised from ‘Stable’ to ‘Positive’. The previous rating action was announced on December 29, 2017.
Revision in rating outlook reflects increase in market share and improved investment decision making process which has translated into superior fund performance during CY18. Continuity of increase in market share, sustained fund performance and translation of initiatives to increase client base and achieve growth in retail AUMs while further enhancing control framework will be positive rating drivers. Product portfolio is comprehensive with focus on consolidation of similar funds and launch of financial plans in conventional and Shariah compliant segments.
With industry Assets Under Management (AUMs) declining by 2% in FY18 and HBL AMC posting growth in AUMs, market share increased to 9.86% (FY17: 9.03%) at end-FY18. At end-October’2018, HBL AML’s AUMs amounted to Rs. 62.1b (June’18: Rs. 60.8b; Oct’17: Rs. 57.7b). During July’2018, closed-end funds (HBL Growth Fund (HGF) and HBL Investment Fund (HBL IF) were converted into open-end funds. AUMs of HGF and HBL IF have increased by 2% post conversion. Management is cognizant that the size of in-house sales force and proportion of retail investment in relation to total AUMs needs to be augmented. To that effect, management’s focus is directed towards strengthening retail investment proportion by expanding outreach through HBL Bank and own branch expansion, strengthening in-house sales force and roll-out of digital initiatives.
Relative ranking of funds vis-à-vis peers has depicted broad based improvement across most fund types in the ongoing calendar year. Five out of six equity funds reported returns in the first quartile vis-à-vis peers. Most income and money market funds are ranked in the first and second quartile. Ratings also reflect adequate governance and control framework. Operating profitability increased during 9MCY18 on account of lower expenses during the period. Maintaining adequate cushion for debt servicing, as projected, is considered important. Comfort is drawn from strong profile and expected support of the Sponsor, if needed.
For more information, contact:
CFA
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
Email: sobia@jcrvis.com.pk