Karachi, December 29, 2017 (PPI-OT):JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Management Quality Rating of Al Meezan Investment Management Limited (AMIML) at ‘AM-1’ (AM-One). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on March 17, 2017.
The assigned rating reflects strong asset-management franchise and healthy assets under management (AUM) profile, adequate governance and control framework, stable and professional management team and well defined investment process which barring the ongoing year have translated into competitive fund returns on a risk adjusted basis. AMIML offers a comprehensive product suite of 27 (FY16: 24) investment plans and mutual funds spanning from basic equity and income funds to commodity fund.
AUMs (net of Fund of Funds) witnessed healthy growth during FY17 and have outpaced industry growth. Moreover, proportion of retail investors has been maintained and is the highest amongst peer AMCs. In line with industry trend, a sizeable decline in AUMs has been witnessed in the first five months of the ongoing fiscal year. Despite the sluggish equity market performance (where a sizeable proportion of AUMs are concentrated), AUMs growth is expected to remain in line with industry trend on account of strong franchise that the institution enjoys.
The investment decision making process is well-structured and combines a top down view with fundamental bottom-up analysis. The decision making process is committee based with the participation of key senior management personnel. Strength and experience of the investment management team are consistent with the assets being managed, backed by adequate analytical resources and clear segregation of responsibilities. Performance of equity funds under management have depicted weakening in the ongoing year but are competitive over a longer time horizon. Given the investment management expertise, JCR-VIS expects fund performance to show substantial improvement, going forward. As a key rating driver, performance of funds under management will continue to be tracked by JCR-VIS.
Overall corporate governance framework is supported by adequate board composition and oversight. Recently, Board Risk Management Committee has been formed which is expected to enhance risk related oversight. Scope and operations of compliance and audit function are considered satisfactory. However, compliance with best practices requires segregation of these functions.
For more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi