logo
The Pakistan Credit Rating Agency Limited
Press Release

Date
27-Jun-19

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

Applicable Criteria

Related Research

Disclaimer
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
(27-Jun-19)
Previous
(28-Dec-18)
Action Maintain Maintain
AM Rating AM3+ AM3+
Outlook Stable Stable
Rating Watch - -

The rating reflects the company's adequately structured investment decision making process, experienced management, average fund performance and limited fund slate. The rating takes into account the company's association with a commercial bank, Bank Al-Habib Limited, though the translation of the brand name into AUMs remains limited. The company’s AUMs decreased by ~18% and stood at ~PKR 3.3bln at end Mar-19 as compared to ~PKR 4bln in Mar-18. The company made a net loss for 9MFY19 despite having significant increase in its income. The loss was mainly due to rising administrative and operating expenses. Due to losses, the company’s equity is eroding gradually and falling below the minimum regulatory capital requirement of PKR 230mln. The management intends to strengthen its financial performance by increasing its 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 functions.
</br>
The rating is dependent on the company’s ability to sustain its system share, recoup equity position, gain in terms of assets under management, diversification in fund slate and 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 six 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 3.2bln at the end of May-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.