Press Release

VIS Reaffirms Management Quality Rating of Al Meezan Investment Management Limited
 

Karachi, December 31, 2020: VIS Credit Rating Company Ltd. (VIS) has reaffirmed the Management Quality Rating of Al Meezan Investment Management Limited (AMIML) at ‘AM1’ (AM-One). ‘AM1’ rating denotes excellent management characteristics exhibited by the asset manager. Outlook on the assigned rating remained same at ‘Stable’. Previous rating action was announced on November 23, 2019.

The assigned rating incorporates AMIML’s dominant market positioning in the asset management industry, being the largest AMC in the country. In FY20, the company continued to lead the industry in terms of growth in Assets under Management (AUMs), with market share growing from 17% to 20% on consolidated basis, and from 45% to 46% in the Shariah compliant segment. The rating is further supported by the company’s comprehensive Shariah compliant product offerings, a sizable retail clientele and strong distribution network. Amidst the pandemic-related lockdown, growth was largely driven by corporate clients, as retail distribution network was significantly impacted across the industry. As a result increase in investor concentration and drop retail AUMs has been noted, as is the case with the industry.

The rating takes into account the presence of a formalized and documented investment process with sound investment research infrastructure. Corporate Governance framework in place is considered adequate, with Board & Board Committees being in place and their compositions being aligned with best practices.

During FY20, the company’s core revenues were lower, mainly on account of a shift in AUMs towards lower management fee-based money market funds and lower performance incentive, as equity market performance remained volatile. Nevertheless, the company did manage to grow the bottom line by 1.7x, on the back of higher dividend income and one-off gain. Leverage free balance sheet supports assessment of financial profile. The assigned rating remains dependent on maintenance of market position and AUM profile while fund performance leaves room for improvement.

For further information on this rating announcement, please contact Mr. Arsal Ayub (Ext: 216) or the undersigned (Ext: 306) at (021) 35311861-66 or email at info@vis.com.pk

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Asset Management Companies (June 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/AMC-Methodology-201906.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (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.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.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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited