JCR-VIS Credit Rating Company Limited has upgraded the Management Quality Rating of ABL - Asset Management Company Limited (ABL AMC) to 'AM3+' (AM Three Plus) from 'AM3' (AM Three). The rating action takes into account improvement in systems and controls and performance of the asset management company since last review.
Going forward, the business plan of the company may facilitate it to further strengthen its market position. Outlook on the rating has thus been revised from 'Stable' to 'Positive'. ABL AMC is a wholly owned subsidiary of Allied Bank Limited and benefits from the bank's strong franchise and widespread branch network. After the launch of two new funds during 2010, the AMC is now managing four open end funds, including two money market funds, an income fund and a stock fund.
Performance of the two older funds was strong with both funds being among the top performing funds in terms of return in FY10. Total AUMs of ABL AMC increased from Rs 7b as at June 30, 2009 to Rs 8.7b as at June 30, 2010 and further to Rs 12b as at November 30, 2010.
Market share of ABL AMC increased to 4.4 percent at the end of FY10 from 3.4 percent at the end of the preceding year. Going forward, the company plans to increase its market presence through further diversification in its product offerings. The management of the fund strengthened during FY10, with the appointment of a new Chief Executive Officer (CEO) and a Chief Investment Officer (CIO).
The new management has focused on strengthening the research and compliance functions and put in place the risk management function. Going forward, these functions need to be aligned with the growing needs of the company. The company utilises the branch network of ABL for fund distribution. While share of retail investors has increased progressively, corporate investors still comprise major proportion of funds under management. JCR-VIS will continue to monitor performance of the funds and trends in unit holder concentration, going forward.-PR
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