Karachi, December 31, 2018 (PPI-OT): JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Management Quality Rating (MQR) of ABL Asset Management Company Limited (ABL AMC) at ‘AM2++’ (AM-Two-Double Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 29, 2017.
The assigned rating derives strength from ABL AMC’s strong sponsor profile, effective corporate governance framework, adequate control functions and balanced board composition. However, relative performance of funds under management has depicted weakening and remains a key rating driver; JCR-VIS will continue to monitor the performance of assets under management across different asset classes over time. Moreover, the rating remains dependent upon improvement in market share and AUM profile.
As at end-FY18, market share (adjusted for funds of funds) depicted slight increase to 5.9% (FY17: 5.7%). Increase in AUMs has primarily been witnessed in ABL Cash Fund. During the period under review, ABL AMC launched an additional fund namely Allied Finergy Fund. Despite projected increase in proportion of retail AUMs, quantum of retail AUMs has declined on a timeline basis. Moreover, size of sales force has also remained below projected level. To improve AUM profile, a number of initiatives including increasing size of sales force and continued focus on alternate delivery channels are being undertaken by the management.
Turnover was seen at the position of Head of Risk Management in 2018 which was subsequently filled. However, turnover at the operational level remains on the higher side. Stability of human resources is considered important from a rating perspective going forward.
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