The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (09-January-2007)
    PACRA Maintains the Asset Manager Rating of
Dawood Capital Management Limited (DCM)
 

 
Analyst
Moin Khalid
(+92-42-586 9504)
moin@pacra.com

 

 

 













 

 

 

 

 

 

 

Disclaimer
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The Pakistan Credit Rating Agency (PACRA) has maintained the asset manager rating of Dawood Capital Management Limited (DCM) at “AM3”. The rating reflects the company’s strong capacity to manage the risks inherent in asset management and the asset manager meets high investment management industry standards and benchmarks.

The company’s strong capacity emanates from reasonably experienced management team, association with a strong and expanding business group, adequate risk management policies, and reasonable supporting systems. Meanwhile, the relative size and diversity of funds under management remains limited, an outcome of short-track record. However, as the funds under management increase the company would be required to strengthen its human resource base to provide an effective platform in the increasingly competitive environment. The rating also recognizes the management’s well-conceived business plan of focusing on small retail investors through offering innovative products and following a distinctive marketing strategy. However, as the implementation of this strategy is at an initial stage, the impact thereof on business expansion and the related timeline remain to be seen.

About the company: DCM was incorporated in 1993 as a venture capital company, and listed on Karachi Stock Exchange. The company was acquired by the First Dawood Group in 1999. During 2003, the company changed its objective to undertake asset management and investment advisory business. The sponsoring group is a branch of the reputable Dawood family, which is one of the leading business groups in Pakistan. The combined effective holding of the Group in the company is around 60%. Apart from First Dawood Investment Bank (FDIB), the sponsoring group also operates two leasing modarabas, and is further diversifying its operations through joint venture arrangements by setting up an Islamic Bank, Takaful Insurance and Wind Power generation project. DCM currently has two funds under management, with total assets under management aggregating to around PKR 2bln. The management is in the final process of launching an Islamic fund in early 2007.

 
 
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's 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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