Press Release

JCR-VIS Upgrades Management Quality Rating of ABL Asset Management Company Limited

Karachi, December 29, 2017: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has upgraded the Management Quality Rating of ABL Asset Management Company Limited (ABL AMC) to ‘AM2++’ (AM-Two-Double Plus) from ‘AM2+’ (AM Two Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 30, 2016.

The rating incorporates the company’s increasing market share, improving funds’ performance and strengthening of investment management practices on a timeline basis. The rating also takes into account ABL AMC’s effective corporate governance framework, professional management team, and balanced board composition. Strong support from the primary sponsor, Allied Bank Limited (ABL), is also a key rating factor; the management intends more effective engagement with the parent bank for the sale of mutual funds, going forward. Moreover, the company’s continuing focus to expand sales force and enhance alternate delivery channels is also taken into consideration.

Market share (adjusted for fund of funds ) increased to 5.7% (Jun’16: 5.5%) by end-Jun’17. AUMs (adjusted for fund of funds) increased to Rs.42.3b (Jun’17: Rs.35.2b; Jun’16: Rs.25.5b) by end-Nov’17 with about 7% market share. Although quantum of retail AUMs increased on a timeline basis, however its proportion in total AUMs has remained largely stagnant. Going forward, the management has embarked upon improving granularity by enhancing proportion of retail clientele. In this regard, the management has segregated the function of Alternate Delivery Channels (ADC), previously a part of business development, and has hired a separate senior resource for the said purpose

During the period under review, ABL AMC launched an additional fund namely Islamic Dedicated Stock Fund, thereby taking total tally of fund offerings to 11 funds. The senior management underwent considerable changes; number of vacant positions were filled including chief investment officer and fund managers. The head of risk has been inducted as a permanent voting member in the investment committee. Overall scope and functioning of the different control functions is considered adequate. Moreover, scope of employee trading policy has been enhanced to cover indirect trading by employees.

During FY17, performance of most funds featured in first and second quartiles. Peer ranking of ABL Cash Fund and ABL Islamic Stock Fund has witnessed noticeable improvement in the ongoing year. As one of the key rating parameters, JCR-VIS will continue to monitor the performance of assets under management across different asset classes over time.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13 or fax to 021-35311872.

Jamal A. Zaidi

Applicable Rating Criteria: Asset Management Companies (March 2016)

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 2017 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