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Karachi, January 28, 2016 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has revised the Management Quality Rating of National Asset Management Company Limited (NAMCO) from ‘AM4+’ (AM Four Plus) to ‘AM4- (AM Four Minus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on January 28, 2015.
The rating reflects NAMCO’s weak relative positioning in an increasingly competitive asset management industry. In the recent years, capacity building in the areas of investment management, product development and marketing has remained subdued on account of limited financial resources available with the company. With gaps in the management team, overall control infrastructure requires continuous focus by the management. Meanwhile, financial health of the AMC is stressed as the company continues to report operating losses; growth in AUMs is required to augment the revenue base of the company for sustainable operations.
With a market share of less than 1% at end-FY15, NAMCO is managing only two funds. The AMC is the largest investor in both the funds. NAMCO Income Fund (NIF) continues to remain non-compliant with the mandatory minimum fund size requirement. A business plan has been formulated under which conversion of funds is planned while development of marketing team is also envisaged.
Return of NAMCO Balanced Fund (NBF) benefited from uptick in the prices of selective stocks while NIF booked reversal of provisioning against a non performing investment during FY15 positively reflecting on fund’s return. During the ongoing year, NIF posted negative return and was ranked lowest in its peer groups.
Subsequent to the equity injection by the main sponsor, NAMCO has become compliant with Minimum Equity Requirement; the equity injection reflects sponsor’s commitment with the company. Moreover, NAMCO’s license to undertake asset management and investment advisory services has been renewed for the next three years with effect from Dec 13, 2013.
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