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The Pakistan Credit Rating Agency Limited

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

Mohsin Naseer
mohsin.naseer@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 assigns Asset Manager Rating to Pak Oman Asset Management Company Limited
 Rating Type Asset Manager
Current
(17-Nov-2016)
Previous
(17-Nov-2016)
 Action  Initial
 AM Rating  AM3
 Outlook  Stable
 Rating Watch - -

The rating reflects the company's affiliation with a development finance institution - Pak Oman Investment Company Limited (POICL). Lately, POICL made equity injection beefing up equity holding. The company's strategy plan envisages elevating AUM base through targeting institutional and retail investors while marketing its current fund slate in medium term; a couple of new funds would be launched simultaneously. With the growth in AUMs, the company plans to beef up its human resource base to strengthen its organisational structure and decision making process. However, high investor concentration and low contribution from the retail segment remains an impediment. Furthermore, timely success of the strategy plan coupled with good management's performance remains to be seen.


The rating is dependent upon the company's ability to effectively execute its business strategy while leveraging its association with POICL. At the same time, ability of the POAMCL's management's performance to beef up the its AUM base would be crucial. In addition, superior fund performance coupled with diversity in the fund slate and investor base through new funds and SMAs would be important.
About the Entity
Pak Oman Asset Management Company (POAMCL) was incorporated in 2006. POICL holds 97% shareholding in POAMCL (FY15: 95%). POICL is a 50:50 joint venture between Government of Pakistan and Sultanate of Oman. The board's chairman H.E. Yahya Bin Said Bin Abdullah Al-Jabri is also the Chairman of the Capital Market Authority of Sultanate of Oman. He also holds an honorable position as Chairman of the Special Economic Zone Authority of A'Duqum, Oman. The company is managing four open-ended funds with asset under management of PKR 1,600mln and SMA portfolio of ~PKR 445mln as at Sept-16.


POAMCL's Board of Directors (BoD) currently comprises eight members including CEO and two independent director. The CEO, Mr. Adeel Ahmed Khan, Masters in Economics, is a seasoned professional and carries extensive experience in the asset management industry. He is supported by a team of professionals.
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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