The Pakistan Credit Rating Agency Limited
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Afnan Iqbal

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PACRA Maintains Asset Manager Rating of MCB-Arif Habib Savings and Investments Limited

Rating Type Asset Manager
(08-Oct-19 )
(08-Apr-19 )
Action Maintain Maintain
AM Rating AM2++ AM2++
Outlook Positive Positive
Rating Watch - -

The rating reflects the company's established position in the domestic asset management industry, experienced and stable management team, diverse product slate and structured investment decision making process. The management is focusing on strengthening its digital platform for better retail penetration, distribution and customer services. Lately, assets under management of the company have come under some pressure due to revaluation deficit and redemption in equity funds. The fund performance remained inline or better than peers. The rating incorporates the company's association with two prominent business conglomerates of Pakistan, Nishat and Arif Habib Groups. Strong sponsor profile and corporate governance framework and investment risk management function bodes well for the company.
The rating is dependent on the company's ability to sustain its market standing. Increasing overall market share, stability of the key human resource and consistent fund performance is important for the rating.

About the Entity
MCB Arif Habib Savings and Investments Limited (MCBAH), incorporated in August 2000 and listed on the Pakistan Stock Exchange, is a major player in the mutual fund industry of Pakistan. In June 2011, MCB Asset Management Company was merged into Arif Habib Investments. The objective was to achieve synergies in asset management business and access a wider distribution network.

The Company's Board has eight members. Two representatives are from MCB, two representatives from Arif Habib Group, three are independent and the CEO. Mian Muhammad Mansha, Chairman MCB, serves as the Chairman of the Board. Mr. Saqib Saleem is the CEO, having work experience of over thirteen years. With overall assets under management of ~PKR42 bln at end Aug’19, the Company is currently managing fifteen open-end funds and two voluntary pension funds. The assets under management of separately managed accounts were ~PKR 35 bln (including direct and fund of funds) at end Aug'19.

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.