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The Pakistan Credit Rating Agency Limited

Date
30-Nov-2016
Analysts
Rai Umar Zafar
rai.umar@pacra.com

Aman Zafar
aman.zafar@pacra.com

+92-42-35869504
www.pacra.com
Applicable Criteria

  • Rating Modifiers | Outlook and Rating Watch (Jun 16) [View]
  • Asset Manager Rating Methodology (Jun 16) [View]

Related Research

  • Sector Study | Asset Management (Mar 16) [View]
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PACRA MAINTAINS ASSET MANAGER RATING OF FIRST CAPITAL INVESTMENTS LIMITED
 Rating Type Asset Manager
Current
(30-Nov-2016)
 Action Maintain
 Long Term AM4++
 Short Term -
 Outlook Stable
 Rating Watch -

The rating recognizes the company's adequately experienced management team and satisfactory structured investment process in line with limited scale of operations. The rating incorporates management's concerted efforts towards sustaining its operations while making strides towards expansion of AUMs and fund slate (currently managing one fund only). The successful execution of business plan with the appointment of new CEO would remain imperative in strengthening the company's position in the domestic AMC indusrty. Furthermore, the company intends to start new venture - applied for a REIT License. This envisages the company's intention to take benefit from the expertise of company's sponsor in the real estate business

The rating remains dependent on achieving sizeable growth in AUMs while diversifying the fund slate. Meanwhile, upholding high governance standards and exercising vigilance with reference to the control environment is crucial. Continued demonstration of good performance by the fund is also critical.
About the Entity
FCIL commenced operations in 1995. FCIL is sponsored by First Capital Securities Corporation Limited (FCSC) - the holding company of First Capital group - with 87% shareholding. Mr. Sulieman Ahmed Said Al-Hoqani - an Omani Investor - holds a strategic stake of 9.2% in FCIL. FCIL is currently managing one open-end, equity fund namely First Capital Mutual Fund (FCMF) with assets under management of PKR 195mln at end-Sep16.

The Board of Directors comprises four members, including the CEO. The remaining two members including the chairman are independent. During the year Syed Nadeem Hussain has been appointed as the new Chairman of the board in place of outgoing chairman Mrs. Amna Taseer. Syed Nadeem Hussain is the former CEO and president of Tameer Microfinance bank. Mr. Imran Hafeez was appointed as the new CEO of FCIL in Sep-16.
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.
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