The Pakistan Credit Rating Agency Limited
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Muhammad Zain Ayaz

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PACRA Maintains Asset Manager Rating of BMA Asset Management Company Limited | Rating Watch

Rating Type Asset Manager
(06-Sep-21 )
(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.

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