The Pakistan Credit Rating Agency Limited
Press Release


Shahzaib Khalid

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PACRA Maintains Asset Manager Rating of Pak Oman Asset Management

Rating Type Asset Manager
(26-Feb-19 )
(28-Aug-18 )
Action Maintain Upgrade
AM Rating AM3+ AM3+
Outlook Stable Stable
Rating Watch - -

The rating reflects the company's sound ownership profile due to its association with a renowned financial institution, Pak Oman Investment Company Limited. Post-merger, the fund slate of the company is composed of eleven open-end funds belonging to all the major fund categories. The corporate governance framework is considered strong on the backdrop of sound board oversight and presence of seasoned professionals in the management team. The organizational structure took strength by filling the vacant position of CIO in Sep-18. The funds' performance remained competitive in relation to their category average returns. Going forward, the management is eyeing growth in SMA business and retail client base which would support the revenue stream. The system share dropped below 1% at end Dec-18 (Dec-17: 1.1%). To enhance the assets under management, a number of initiatives are being taken including the hiring of additional sales force and ongoing focus on alternative distribution channels for enhanced retail market penetration. The average top 10 investor concentration stood at ~90%, making it vulnerable to high redemption pressure.

The rating is dependent on the company's ability to materialize its initiatives to enhance its competitive position, gain in terms of market share and maintaining strong fund performance. Meanwhile, upholding high governance standards, strong control environment and strengthening of risk management is crucial.

About the Entity
Pak Oman Asset Management Company Limited was incorporated on July 28, 2006 as a public unlisted company. It is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a majority owned subsidiary of Pak Oman Investment Company Limited (97%). The remaining shareholders include Oman International Development Company (1.2%), Bank Muscat (0.6%) and National Logistic Cell (1.2%).

The company’s Board of Directors comprise seven members including the managing director of Pak Oman Investment Company, Mr. Bahauddin Khan. The board’s chairman H.E. Yahya Bin Said Bin Abdullah Al-Jabri is the Minister of the Special Economic Zone Authority at A’Duqum, Sultanate of Oman. The company’s diverse product slate includes eleven open-end funds as at Feb'19 belonging to all major categories. Pak Oman has four open-end funds under its name, while seven open-end funds belonged to Askari Investment Management Limited which were acquired by Pak Oman Asset Management Company.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.