JCR-VIS reaffirms rating of HBL Asset Management Limited

Karachi, December 26, 2012 (PPI-OT): JCR-VIS Credit Rating Company Ltd. has reaffirmed the Management Quality Rating of HBL Asset Management Limited (HBL AMC) at ‘AM3+’ (AM – Three Plus). Outlook on the rating remains ‘Positive’.

HBL AMC has eight funds under management, including two pension schemes. On a low-risk spectrum the AMC is managing two money market funds; asset allocation of both the funds has been maintained in line with the stated risk profile of the fund.

The conventional money market fund is the largest fund under management and represents around 60% of total Assets under Management (AUMs); the fund has consistently featured amongst the top performing funds in the peer group. Risk profile of income fund is in the moderate range and instances of non-performance in the fund have been manageable, as also evident from three-year track record of consistent performance depicted by the fund which compares favorably to most of its peers.

Further downside risk in the fund is also considered manageable given that net non-performing assets comprise a low proportion of net assets. In the stock funds category, owing to underinvestment in equities vis-à-vis the allowable limit in a rising market, performance of stock funds under management remained subdued in relation to peers in FY12 and the on-going year. More recent data over the past month however reflects an uptick in performance in relation to peer funds; consistency of the same will be tracked over time.

Adjusted (for investment by associates), market share of the AMC in collective investment schemes has grown on a timeline basis to 4.6% by end-FY12. The company is also managing a sizeable portfolio comprising retirement funds of HBL. Investor profile of funds continues to feature concentration and penetration in the retail market has remained low.

The AMC has recently established a retail team; results in this regard may take time to materialize. Furthermore, meaningful progress towards leveraging the branch network of HBL for marketing the company’s products will also be tracked over time.

In the past year, there has been a change at the helm of the organization. The previous Chief Operating Officer, Mr. Rehan N. Shaikh has succeeded as the CEO of the company; he has been with the AMC since its year of inception. Hiring of additional resources in the Risk and Compliance function, research and fund management teams is on the anvil, which is expected to add greater depth to the management team.

For more information, contact:
Mr. Javed Callea
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk

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