AWTIL's asset manager rating upgraded by PACRA to 'AM2' 

August 02, 2024 (MLN): The Pakistan Credit Rating Agency Limited (PACRA) has upgraded the Asset Manager Rating of AWT Investments Limited (AWTIL) from "AM3++" to "AM2" and changed the outlook from positive to stable.

AWTIL is a wholly owned subsidiary of Army Welfare Trust, a trust established for the welfare and rehabilitation of the widows and dependents of martyrs of the Pakistan Army.

The rating reflects the improved positioning of AWT Investments Limited among peers operating in the asset management industry of the country.

The strong Fund performance of the company was one of the leading indicators considered in the rating.

The composition of AUMs reveals an increasing share of individual investors.

On the technology side, the company has launched a Web portal and a Mobile App, offering a full suite of investor services with elevated customer experience.

The technological developments are solidifying the retail footprints of the company in an increasingly digitalized age.

During FY24, the company recorded robust growth in AUMs clocking in at Rs30bn (FY23: Rs7.3bn).

Consequently, the market share of the AMC enhanced to 1.1% (FY23: 0.5%).

During the year, the company has strengthened its organizational structure by augmenting incumbent departments comprising Risk, Research, Compliance, and IT.

The induction of experienced professionals in the team to spearhead these functions has boded well for the company and Fund performance.

Group synergies have been leveraged and it is shown in the trend line. Sponsor support is a key consideration.

The asset manager is planning to further diversify its product slate by launching of voluntary pension schemes by the end of 1QFY25.

The company has implemented an enhanced version of Asset Connect (Java-based) for the Mutual fund segment.

During 9MFY24, the financial matrix reveals that the total income of the company enhanced to Rs229.7m (9MFY23: Rs65.2m) attributable to enhanced gain from investments clocking in at Rs107m (9MFY23: Rs1.1m) followed by management fee at Rs73.4m (9MFY23: Rs21.1m).

Consequently, the company reported a net profit of Rs48.6m in 9MFY24 against the net loss after tax of Rs62.3m during 9MFY23.

At end-Mar24, the equity base of the company increased to Rs440m (end-Mar23: Rs291m) owing to equity injection from the sponsor along with the internal generation of cashflows.

The rating is dependent on the company’s ability to continuously strengthen its market position.

At the same time, stability in key human resources, structured improvement in risk management framework, and success of initiatives to increase retail AUM will remain crucial for the rating.

Diversification in the AUM base among various fund categories along with improvements in the overall operating platform will bode well for the company.

Copyright Mettis Link News