Press Release

JCR-VIS Upgrades MQ Rating of HBL Asset Management Limited
 

Karachi, October 21, 2013: JCR-VIS Credit Rating Company Ltd. has upgraded the Management Quality Rating of HBL Asset Management Limited (HBL AMC) from ‘AM3+’ (AM - Three Plus) to ‘AM2-’ (AM - Two Minus). Outlook on the assigned rating is ‘Stable’.

The upgrade takes into account reinforcement of various facets of the organization. Management team at HBL AMC has been strengthened and vacancies have been filled with the appointment of competent resources. Core team has exhibited stability over time. Moreover, in an effort to increase share of retail segment and reduce investor concentration, retail sales teams have been developed and marketing infrastructure has been strengthened. Some increase in retail investor base has been noted over the last year; further efforts for bringing about growth in this area are on-going.

The institution’s ability to support investment management function has improved over time. There is a structured investment process in place. Research department generates various reports covering fundamental and technical analysis as well as monthly macroeconomic reports; investment decisions are finalized after discussion at the Investment Committee (IC) level. Compliance function ensures that decisions by the IC are executed by the portfolio management team within the stipulated timeframe. A Board level Risk Management Committee (RMC) has been established recently and is considered positive; risk and compliance function now has direct reporting to the RMC.

Risk profile of both conventional and Islamic money market funds remains aligned with their respective investment policies; return of HBL Money Market Fund featured in the top quartile whereas return of Islamic Money Market Fund was placed at second position out of three funds in FY13. Return of HBL Income Fund was adversely affected by provisioning requirement; future downside risk has however reduced. Performance of Islamic stock fund remained weak in relation to peers; return of conventional stock fund was also lower than peer group average. Performance of Multi-Asset Fund remained strong in relation to peers. The management is re-visiting its strategy on the equities side.

For further information on this rating announcement, please contact the undersigned (Ext. 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 021-35311861-71 or fax to 021-35311872-3.



Javed Callea
Advisor

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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 2013 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