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The Pakistan Credit Rating Agency Limited
Press Release

Date
06-Sep-21

Analyst
Muhammad Zain Ayaz
zain.ayaz@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 BMA Asset Management Company Limited | Rating Watch

Rating Type Asset Manager
Current
(06-Sep-21)
Previous
(06-Sep-20)
Action Maintain Maintain
AM Rating AM4++ AM4++
Outlook Stable Stable
Rating Watch Yes Yes

The rating reflects the BMA Asset Management Company Limited's (or the "Company") modest market share, limited fund slate, eroding equity base due to operational loss and adequate senior management. The Company's AUMs stood at ~PKR 435mln, at end Jun'21 (Jun'20: ~PKR 213mln) with market share of only ~0.04%. The equity of the Company remained under pressure due to losses and currently stands at PKR 171mln at end Jun'21, which is below the regulatory requirement and leads to non-compliance. The senior management is relatively new and the sole purpose of this restructuring is to focus on portfolio advisory and enhance the revenue from this stream. As the Company also offers Investment Advisory Services, therefore, additional equity of PKR 30mln would be required. Funds performance remained below benchmark in FY21. The investor concentration remains high (top ten investors: 93%).
The rating is dependent on operational and financial viability of the company and timely fulfillment of minimum regulatory equity requirement through equity injection from sponsors. Growth in AUMs, achieving sustainable profitability, improvement in organizational structure and timely hiring of key individuals remain imperative for the rating.

About the Entity
BMA Asset Management Company was incorporated in April 2005 and acquired the license for investment advisory and asset management in April 2005 and July 2005, respectively. The ex-CEO of the company, Mr. Khaldoon bin Latif resigned in Nov-18 and the new CEO, Mr. Mian Qasim Saeed Ahmed joined as a CEO in August 2020. The company has two funds under management, BMA Empress Cash Fund in the money market category and BMA Chundrigar Road Saving Fund in the aggressive fixed income category.
The company has a three member board, out of which one member is independent. Mr. Salim Khan was appointed as the Chairman of the board in October 2017. He possesses vast experience in strategic human resource consultancy and organizational development.

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.