PACRA assigns an initial rating of 'AM2' to PQAMCL

October 12, 2023 (MLN): Pakistan Credit Rating Agency Limited (PACRA) has assigned Pak Qatar Asset Management Company Limited (PQAMCL), an initial entry rating of " AM2" for long-term with a stable outlook, latest press release issued by PACRA showed.

PQAMCL or the AMC is part of Pak Qatar Group which is the pioneer and the largest Takaful Group.

The prominent business acumen of the sponsor bodes well for the rating.

On September 21, the AMC initiated its operation in the investment advisory sector as well as the asset management sector.

The company ingeniously identified a market niche while enabling potential investors to maximize return on investments.

PQAMC stands apart amongst its peers with a unique product suite complemented by a versatile Shairah structure.

As of the end of Sep'23, the assets under the management of the company stood at Rs15.7 billion, and at the end of Jun Rs11.1bn (Dec’22: Rs5.3bn) with a current market share of 1%.

This represents the strengthening position of the AMC amongst the peer group.

The company has launched four open-ended funds as part of its diversified product portfolio among these offerings, the Pak Qatar Islamic Income Fund holds a prominent position within the Shariah-compliant income category, currently representing 48.45% of the total weightage in the company's investment offerings.

Additionally, the Pak Qatar Islamic Cash Fund comprises three distinct plans. Meanwhile, the third fund in the portfolio, the Pak Qatar Islamic Stock Fund, operates within the Islamic Equity category.

The company recently introduced an Asset Allocation Fund under the plan structure and is working on the launch of additional plans that fall under the category of Shariah Asset Allocation.

Since the launch of the Funds in Oct'22, the Fund performance of the AMC remained above the industry average.

The AMC is also managing a Separately Managed Account (SMA) discretionary portfolio having a market share of 5% (as of end Jun'23) in the advisory domain with a total industry size of Rs477bn.

On the marketing side, the AMC has been focusing on retail penetration through the PQFTL distribution channel which has more than 100 branches in major cities across Pakistan.

The AMC is further in the process of establishing its distribution channels with leading commercial banks which will continue to support the growth in the retail segment.

On the financial side, AMC experienced positive growth during the period under review. During FY23, the company's topline significantly increased to Rs105 million (FY22: Rs44m).

Moreover, the net profit during FY23 increased by 61.6% to Rs47m (FY23: Rs31m). The company's equity stood at PKR 522mln at the end Sep'23, comfortably exceeding the regulatory requirement.

The rating is dependent upon the Company's ability to sustain its market share and uphold strong investment processes.

A sustained upward trend in fund performance along with a consistent increase in market share will continue to have visible affirmation in the rating.

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