Muhammad Azmat Shaheen
PACRA Assigns Positive Outlook to Asset Manager Rating of JS Investments Limited
|Rating Type||Asset Manager|
The assigned rating reflects modest positioning of JS Investments Limited (“JSIL” or the “Company”) in the competitive asset management industry. The rating incorporates sound governance framework, experienced management team, adequate investment decision-making process, and satisfactory control infrastructure. The research and investment functions of the company are considered adequate. The AUMs of JSIL was around PKR 27.5bln as on end-Jun'22 (Jun'21: PKR 17.6bln) mainly due to significant growth in JS Cash Fund. Consequently, the market share increased to 2.2% (Jun’21: 1.7%). JSIL has an adequate fund slate to cater to the needs of conventional and Shariah-focused clientele. The Company has recently launched a unique fund "JS Microfinance Sector Fund" to serve to cater the growing microfinance needs of individuals. The overall fund performance remained satisfactory. While Shariah Compliant Income and Money Market and Conventional Money Market comfortably exceeded both the industry average and benchmarks. Furthermore, the Company has also expanded its product slate by launching JS Momentum Sector Fund and JS Rental REIT Scheme.
On financial side, the management fee of the JSIL has reported a loss of PKR 50mln for 1QCY22 (CY21: PKR -300mln). The equity stood at PKR 1.4bln at year-end-Mar’22, which is well above the minimum capital requirement of PKR 230mln. Recently, the subsidiary Company "JSIL-RMC" of JSIL launched a rental REIT Scheme, which would further strengthen the management fee of JSIL. On the digital side, JS Bank's novel product "Zindagi" has also supported the Company to engrave its footprints in digitalization. Furthermore, the Company has also launched digital account opening process. The rating incorporates the Company's association with JS Bank Limited and potential synergies due to established presence of JS Group in the financial sector.
The rating is dependent on the management's ability to effectively execute business development plans and leveraging its digital initiatives to strengthen its operations and outreach. Sustaining above average fund performance, increasing market share and further strengthening investment process remains key rating factors.
JS Investments Limited was established in 1995 and is listed on the Pakistan Stock Exchange. The Company is part of the Jahangir Siddiqui (JS) Group. JS Bank Limited holds ~85% shareholding in the Company. JS Group has strong presence in the financial sector with entities operating in banking, insurance, brokerage, and asset management sectors. The group has recently ventured into energy infrastructure and OMC segments. JS Investments possesses licenses for Asset Management, Investment Advisory, Private Equity, Venture Capital and REIT management.
JSIL’s control vests in seven-member board of directors including the CEO. There are two independent directors while all other directors except the CEO are non-executive. Assets under management of the Company are spread across thirteen funds in eleven different Conventional and Shariah Compliant Categories, three voluntary pension schemes, one Exchange Traded Fund and one dedicated equity fund..