Karachi, December 31, 2018 (PPI-OT): JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has maintained the Management Quality Rating of JS Investments Limited (JSIL) at ‘AM2’ (AM-Two). Outlook on the assigned rating has been revised from ‘Stable’ to ‘Positive’. The previous rating action was announced on January 4, 2018.
The assigned rating takes into account growth in AUMs translating into higher market share, sound corporate governance framework and adequate investment decision making process. JSIL manages a comprehensive product suite comprising fourteen open end funds and Separately Managed Accounts (SMAs) for high net worth clients and institutions. Growth in retail AUMs and consistency in returns are important rating determinants going forward.
While AUMs of industry decreased by 2.0%, AUMs of JSIL witnessed an increase of 13.3% to 15.3b (FY17: Rs. 13.5b) at end-FY18 vis-à-vis the preceding year. Resultantly, market share of JSIL witnessed an increase to 2.6% (FY17: 2.2%) at end-FY18. Growth in AUMs of the company was facilitated by launch of Islamic Hybrid Fund of Funds, specifically capital preservation and active allocation plans. Total AUMs of JSIL stood at Rs. 17.8b at end-Oct’2018.
Going forward, management plans to launch new Hybrid Fund of Funds in conventional space to facilitate growth in AUMs. Achievement of targets specified in the business plan remains a key rating factor. Growth in SMA business and active clients remain areas of focus for management. The ongoing business development initiatives being undertaken by the company are leading to operational losses. Relative ranking of funds vis-à-vis peers decreased in FY18; however, improvement has been observed in the first quarter of the ongoing year.
In line with its growth strategy, the management’s focus is geared towards strengthening retail outreach of the sales team through an extensive training program, where low turnover would be beneficial. Considerable progress has been observed in enhancing AUMs through parent bank’s branch network. Management is targeting to add one other partner to its distribution network during the ongoing year. Corporate governance framework is considered sound with adequate Board oversight and presence of seasoned professionals in senior management team.
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