The Pakistan Credit Rating Agency (Pacra) has assigned an asset manager rating of ''AM2'' to Arif Habib Investment Management Limited (AHIML), ''A+(f)'' (A plus) to Pakistan Income Fund (PIF) ''AA(f)'' (Double A) to Pakistan Premier Fund Limited (PPF) and to Pakistan Stock Market Fund (PSM).
''AM2'' rating reflects the company''s outstanding capacity to master the risks inherent in asset management. In a span of four years, the company has successfully launched five Funds and plans to launch another three in the coming year. AHIML has sound internal systems and processes, a high degree of independence and control, effective asset allocation and risk management policies and a qualified and experienced management team.
AHIML manages three open-end funds and acts as investment adviser to three closed-end funds. The company is targeting to capture a substantial market share by focusing on increasing the number and size of funds under management. Consequently, AHIML is pursuing an aggressive marketing strategy with a focus on retail investors.
AHIML has over Rs 10.5 billion assets under management, and equity of the company stood at Rs 115.3 million as on June 30, 2004. AHIML serves a diverse client base, which makes it independent from any one source of business.
Pacra rating of PIF is based on consistent growth and improving performance of the Fund. It also takes into account the financial strength of the management company and high quality of management coupled with independent research and effective asset allocation and risk management policies.
PIF relies heavily on COTs and consequently has a low proportion of its investments in government securities and TFCs. Going forward, whether the futures market, the alternative avenue to COT, will be able to pick up the COT volume is uncertain.
However, considering that the Fund portfolio does not contain any locked-in assets in long-term fixed income securities and the proven ability of the management to capitalise on emerging opportunities in the market, PIF depicts adequate capacity to respond to future opportunities or stress situations. In Pacra''s view, PIF is expected to maintain its performance relative to its peers.
Pacra has assigned a fund rating Pakistan Premier Fund Limited (PPF) and to Pakistan Stock Market Fund (PSM). The rating is based on consistent growth and improving performance of the Funds. It reflects good financial standing of the management company/investment advisor, Arif Habib Investment Management Limited (AHIML), and high quality of management coupled with independent research and effective asset allocation and risk management policies.
The rating is further augmented by the quality of equity holdings in terms of liquidity and dividend payout enabling management to capitalise on emerging market opportunities.
A high exposure to equities and the threat of increasing interest rates, with the current range-bound trend of the stock market, make future earnings vulnerable to market volatility.
However, owing to the asset base and quality of management, the Funds depict strong capacity to respond to future opportunities or stress situations and are expected to maintain their performance relative to peers and the KSE-100 Index.
ABOUT THE COMPANY: AHIML, incorporated in August'' 2000, is one of the largest asset management companies in Pakistan with over PK Rs 10.5 billion assets under management. AHIML is an associated undertaking of Arif Habib Securities Limited (AHSL), a leading securities brokerage firm also offering research and corporate finance services.
AHSL has one of the largest brokerage operations on Karachi Stock Exchange. AHSL owns 40 percent shares in AHIML. Of the individual shareholders, M Arif Habib is the largest shareholder at 40 percent. AHIML manages three open-end funds and acts as investment adviser to three closed-end funds.
The current Chief Executive of AHIML, Nasim Beg, is a CA with over 30 years experience in the financial sector as well as in the domestic and international mutual fund industry.