Press Release

JCR-VIS Assigns Positive Outlook to Management Quality Rating of HBL Asset Management Limited
 

Karachi, December 28, 2018: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has maintained the Management Quality Rating (MQR) of HBL Asset Management Limited (HBL AML) at ‘AM2+’ (AM-Two Plus). Outlook on the assigned rating has been revised from ‘Stable’ to ‘Positive’. The previous rating action was announced on December 29, 2017.

Revision in rating outlook reflects increase in market share and improved investment decision making process which has translated into superior fund performance during CY18. Continuity of increase in market share, sustained fund performance and translation of initiatives to increase client base and achieve growth in retail AUMs while further enhancing control framework will be positive rating drivers. Product portfolio is comprehensive with focus on consolidation of similar funds and launch of financial plans in conventional and Shariah compliant segments.

With industry Assets Under Management (AUMs) declining by 2% in FY18 and HBL AMC posting growth in AUMs, market share increased to 9.86% (FY17: 9.03%) at end-FY18. At end-October’2018, HBL AML’s AUMs amounted to Rs. 62.1b (June’18: Rs. 60.8b; Oct’17: Rs. 57.7b). During July’2018, closed-end funds (HBL Growth Fund (HGF) and HBL Investment Fund (HBL IF) were converted into open-end funds. AUMs of HGF and HBL IF have increased by 2% post conversion. Management is cognizant that the size of in-house sales force and proportion of retail investment in relation to total AUMs needs to be augmented. To that effect, management’s focus is directed towards strengthening retail investment proportion by expanding outreach through HBL Bank and own branch expansion, strengthening in-house sales force and roll-out of digital initiatives.

Relative ranking of funds vis-à-vis peers has depicted broad based improvement across most fund types in the ongoing calendar year. Five out of six equity funds reported returns in the first quartile vis-à-vis peers. Most income and money market funds are ranked in the first and second quartile. Ratings also reflect adequate governance and control framework. Operating profitability increased during 9MCY18 on account of lower expenses during the period. Maintaining adequate cushion for debt servicing, as projected, is considered important. Comfort is drawn from strong profile and expected support of the Sponsor, if needed.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 201) or the undersigned (Ext: 207) at 35311861-70 or fax to 35311872-3.


Jamal Abbas Zaidi
Advisor


Applicable Rating Criteria: Mutual Fund Rating (March 2016)
http://www.jcrvis.com.pk/docs/AMC-Methodology-201603.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited JCR-VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2018 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited