Press Release
VIS Maintains Rating of Al Meezan Investment Management Limited
Karachi, December 31, 2019: VIS Credit Rating Company Ltd. (VIS) has maintained 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 has been revised from ‘Negative’ to ‘Stable’. Previous rating action was announced on December 28, 2018.
Assigned rating incorporates AMIML’s market leadership position in terms of AUMs in the mutual fund industry as well as dominant position in the Shariah compliant asset management category. AMIML enjoys strong Islamic asset-management franchise as reflected by the Company holding a 45% market share (at end-Sep’2019) in the fast growing Shariah compliant segment while overall market share stands at 18% (at end-Sept’2019). Rating takes into account healthy assets under management (AUM) profile with sizeable retail AUMs, adequate governance & control framework, stable & professional management team and well defined investment process; although fund performance of equity funds has room for improvement. During the ongoing year, internal audit and compliance functions were segregated to strengthen control environment. Compliance with KYC and AML guidelines remain the key focus area on the control front.
During the ongoing year, AMIML continued to strengthen the sales infrastructure through addition of new branches. Aggressive sales strategy planned to continue through further strengthening of sales team and ADCs, expansion of geographic footprint and enhancement of customer base through digital initiatives. Shariah compliant product portfolio is comprehensive. Enhanced focus on strengthening fixed income product portfolio facilitated in improving market share. Profitability profile for FY19 has been impacted due to decline in core income and sizeable unrealized loss on revaluation of investments. Leverage free balance sheet supports assessment of financial profile. Rating remains dependent on maintaining market position and AUM profile while improving performance of equity funds. Clearance of KYC backlog in line with internal timelines is also considered important.
For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext: 213) or the undersigned (Ext: 201) at (021) 35311861-66 or email at info@vis.com.pk
Javed Callea
Advisor
Applicable Rating Criteria: Asset Management Companies (June 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/AMC-Methodology-201906.pdf