Press Release
VIS Reaffirms Management Quality Rating of Al Meezan Investment Management Limited
Karachi, December 29, 2023: VIS Credit Rating Company Limited (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. Previous rating action was announced on December 30, 2022.
Headquartered in Karachi, Al-Meezan Investment Management Limited (‘AMIML’ or ‘the AMC’) is a subsidiary of Meezan Bank Limited, the largest Islamic Bank in the country. Other major stakeholder of AMIML is Pak Kuwait Investment Company Limited. The overall Asset Management Company (AMC) industry has experienced growth of 28.6% during FY23 while a shift toward money market and income fund was noted during period across the industry capitalizing on high interest rates prevailing in the market.
The assigned rating incorporates AMIML’s dominant market positioning in the asset management industry. The AMC has continued to maintain its dominant market position as the largest AMC in the industry. The AMC’s AUMs growth rate of 74.6% has also outpaced the overall industry AUMs growth rate of 47.2% to close AUMs at Rs 335.3 billion during the period June’22 to Sept’23. In addition, Al Meezan also achieved Rs 400 billion milestone in the month of December 2023. Overall AUM mix since last review has tilted towards Islamic income and money market funds while proportion of equity funds in Assets under Management (AUMs) has declined. The AMC's AUM concentration in its top 3 funds remains relatively elevated at 68.4% as of Sept’23 (June’23: 69.9%; Jun’22: 65.3%). Retail AUMs in relation to total AUMs increased hence client concentration has trended down.
Fund performance has declined during FY23 as AUMs placed in the first two quartile represent 37.1% of the AUMs, albeit the same has witnessed improvement during Q1’FY24 to 44.3% of the total AUMs. Rating also takes into accounts adequate Corporate Governance framework with board and its Committees aligned with best practices.
The AMC’s revenue grew by 39.5% YoY in FY23 amid growth in AUMs. AMIML's financial risk profile is conservative with no debt on its balance sheet. Going forward, maintaining market positioning along with improvement in relative funds performance is important from the rating’s perspective.
For further information on this rating announcement, please contact Mr. M. Amin Hamdani (Ext: 217) or the undersigned (Ext: 208) at (021) 35311861-4 or email at info@vis.com.pk.
Syed Asif Ali
Executive Director
Applicable Rating Criteria: Asset Management Companies
https://docs.vis.com.pk/docs/AMC-Methodology-201906.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf
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