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The Pakistan Credit Rating Agency Limited
Press Release

Date
28-Dec-18

Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Asset Manager Rating of Habib Asset Management Limited

Rating Type Asset Manager
Current
(28-Dec-18)
Previous
(30-Jun-18)
Action Maintain Maintain
AM Rating AM3+ AM3+
Outlook Stable Stable
Rating Watch - -

The rating reflects the company's experienced management, adequately structured investment decision making process and limited fund slate. The rating takes into account the company's association with a strong commercial bank, Bank Al-Habib Limited, though translation of this brand name into AUMs remains limited. The company’s AUMs reached ~PKR 4bln at end Nov-18 as compared to ~PKR 3bln in Dec-17, but still remained low when compared to its peers. Meanwhile, rising administrative and operating expenses mainly (sales and distributors commissions) due to its business expansion have had adverse impact on its profitability. The management is cognizant of this and intends to strengthen its financial performance by increasing its fund slate and fund management revenue through the fresh influx of AUMs with a major focus on both retail and institutional clientele. The company is in the process of expanding the human resource and strengthening its research and risk management functions.

The rating is dependent on the company’s ability to enhance its market position, gain in terms of assets under management, diversification in fund slate and maintain strong performance of its funds. Meanwhile, upholding high governance standards and strengthening of risk management is crucial for the rating.

About the Entity
HAML, incorporated in September 2005 as an unlisted public limited company, is licensed to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a part of Habib group, the oldest and a distinguished name in Pakistan’s banking circle, with interest in insurance, sugar, textile, auto, food and trade sectors. Habib family and associates, a distinguished name in Pakistan, owns around 70% of shareholding in the company, while Bank AL Habib being the single largest shareholder holds 30% stake in the company.

HAML’s BoD consists of five members, including the CEO. The CEO, Mr. Imran Azim, is an MBA and has profound experience in the mutual fund industry. The company is currently managing six open-end funds with assets under management of ~PKR 4bln at the end of Nov-18.

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.