Karachi, January 04, 2018 (PPI-OT):JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Management Quality Rating of JS Investments Limited (JSIL) at ‘AM2’ (AM-Two) with a ‘Stable’ Outlook. The previous rating action was announced on January 5, 2017. JSIL manages a total product suite comprising fourteen open end funds and fifteen SMAs. Net Assets under Management (AUMs – adjusted for Fund of Funds and Separately Managed Accounts) amounted to Rs. 12.3b (FY17: Rs. 13.4b, FY16: Rs. 8.7b) at end-December 2017 with market share of JSIL maintained at 2.0%. In pursuing a growth strategy, JSIL plans to launch two new funds in the balanced and dedicated equity categories and four new plans in the active allocation/capital preservation space in the coming year. Achievement of targets specified in the business plan remains a key rating factor.
Rating continues to be underpinned by the operational losses being experienced by the company and turnover at key senior management positions since last review. Earlier in CY17, JSIL experienced a change at the helm, with Mr. Hasnain Raza Nensey assuming the office of Chief Executive Officer. Following this, management level changes were witnessed at positions of Head of Research, Head of Information Technology, Head of Human Resources and Administration and Chief Strategy Officer.
Revamping of customer relations department has been undertaken by adding additional resources. Investment management and research teams were also bolstered by hiring of new fund managers and research analysts. Compliance and risk, as a combined function, monitors various aspects pertaining to regulations, market and operational risk. Going forward, stability of the management team, which is being addressed, is considered important to achieve long term objectives of the company.
In line with its growth strategy, the management’s focus is geared towards strengthening retail outreach of the sales team through an extensive hiring program. In addition to the development of in-house sales team, progress has also been made recently in enhancing the utilization of the parent bank’s network for generating sales in the tranche-based active allocation plans. AUMs were also contributed by the parent bank’s branch network in two (02) active allocation plans already launched.
JCR-VIS will continue to monitor the results of these initiatives. Some improvement in retail investor base has been noted over the last year; further efforts for bringing about growth in this area are on-going. During FY17, performance of most funds featured in first and second quartiles with some weakening in the first five months of FY18; management expects performance to be recouped in full year FY18. 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:
CFA
JCR-VIS Credit Rating Company Limited
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