JCR-VIS reaffirms Management Quality Rating of PICIC Asset Management Company Limited

Karachi, December 29, 2015 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Management Quality Rating of PICIC Asset Management Company Limited (PICIC AMC) at ‘AM2-’ (AM-Two Minus). In view of the divestment by NIB Bank Limited (NBL) of its equity stake in PICIC AMC, the rating of the AMC continues to be placed under ‘Rating Watch Developing’ status. A rating review will be considered as further developments materialize in this regard. The previous rating action was announced on February 13, 2015.

The rating reflects PICIC AMC’s structured investment process and adequate control environment instituted by the management. PICIC AMC is a mid-sized AMC with market share declining to 5.2% at end-F15 (FY14: Rs. 6.7%) on account of large redemptions; improvement was noticed in the AUMs during the ongoing year primarily among the open end funds. PICIC AMC manages a portfolio of six open-end, two closed-end funds and Separately Managed Accounts.

The AMC follows a disciplined investment process. Portfolio investments and re-balancing decisions are executed through the Investment Committee and are supported by research opinions. The portfolio is monitored on an on-going basis with modifications made on the basis of trigger events. For equity funds, investment strategy mainly focuses on medium to long term investment horizon which in turn also reduces price volatility. The AMC has laid out a clear organization structure. Key investment professional are experienced in the relevant asset class and have demonstrated a satisfactory track record. In view of the proposed merger, hiring at the senior management level was restricted.

Performance of the stock funds have depicted improved relative performance during the ongoing year. In relation to peers, the performance of PICIC Cash Fund and PICIC Islamic Income Fund was in the top quartile during FY15 while performance of PICIC Income Fund was in the fourth quartile. Performance of the closed-end funds under management remained weak on account of subdued performance of oil and gas sector.

For more information, contact:
Ms. Sobia Maqbool
CFA
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk