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The Pakistan Credit Rating Agency Limited

Date
15-May-2017
Analysts
Rai Umar Zafar
rai.umar@pacra.com

+92-42-35869504
www.pacra.com
Applicable Criteria

  • Asset Manager Rating Methodology (Jun 16) [View]

Related Research

  • Sector Study | Asset Management (Apr 17) [View]
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PACRA Maintains Asset Manager Rating of Habib Asset Management Limited
 Rating Type Asset Manager
Current
(15-May-2017)
Previous
(08-Jun-2016)
 Action Maintain Harmonize
 AM Rating AM3+ AM3+
 Outlook Stable Stable
 Rating Watch - -

The rating reflects that the company meets good investment management standards and benchmarks. The rating captures the company's qualified management team and adequately structured Investment process. The rating incorporates HAML's association with a strong commercial bank - Bank AL-Habib Limited. However, the desired benefits out of this association towards enhancing the AUM base and strengthening the HAML's brand value remains limited. The company remained constrained in expanding in competitive landscape of the industry, it has nominal system share with largely stagnant AUMs. The performance of the funds was average compared to the peers hence highlighting the need to strengthen the decision making process. The company's funds currently have significantly high concentration levels. The company experienced changes in the management where certain key personals resigned. This has given the opportunity to streamline its organizational structure, which is now relatively smart and clear.

The rating is dependent upon company’s ability to nurture requisite human resource, while continuously improving systems and processes. Developing an effective marketing strategy to bring expansion in its AUMs would remain critical.
About the Entity
HAML, incorporated in September 2005, is licensed to carry out asset management services under the Non-Banking Finance Companies Regulations. Habib family and associates - a distinguished name in Pakistan - own around 90% of shareholding in the company, wherein Bank AL Habib Limited (BAHL) being the single largest shareholder holds 30%. The bank has an asset base of PKR 708bln at end-Dec16. HAML is currently managing five open-end funds with an AUM of PKR 2.9bln end Mar-17.

HAML's BoD consists of seven members, including the CEO. Mr. Abbas D. Habib, a senior distinguished entrepreneur, chairs the BoD of the AMC. Mr. Imran Azim, the CEO of HAML, is an MBA and has profound experience in Pakistan's mutual fund industry.
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.
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