The Pakistan Credit Rating Agency Limited
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Muhammad Zain Ayaz

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PACRA Assigns Positive Outlook to Asset Manager Rating of Pak Oman Asset Management Company Limited

Rating Type Asset Manager
(15-Feb-21 )
(28-Aug-20 )
Action Maintain Maintain
AM Rating AM3+ AM3+
Outlook Positive Stable
Rating Watch - -

The rating recognizes Pak Oman Asset Management Company Limited's ("POAMCL" or the "Company") association with an established and renowned financial institution, Pak Oman Investment Company Limited. The rating reflects the Company's experienced management, structured investment decision making process and adequate governance framework. The AUMs of the Company has increased by 50% since Jun'20 and stood at PKR 6.6bln at end Dec'20. The overall, fund performance of the Company remained above the benchmark except for asset allocation category which under performed and has limited size. Going forward, the management is focusing on retail penetration by enhancing retail client base and growth in SMA business. This would support the revenue stream. To enhance the assets under management, a number of initiatives are being taken including the expansion of sales force and ongoing focus on alternative distribution channels for enhanced retail market penetration. Furthermore, in order to diversify its existing fund slate, the Company is also planning to launch new funds in equity and income category. The Company has issued right shares to meet the minimum equity requirements regulatory as prescribed by SECP. The Company has also paid major amount of long term loan hence, the financial risk profile of the AMC is supported by adequate capital structure, which bodes well for the rating.
Change in outlook assigned to the Company reflects the growing AUMs, diversifying fund slate, retail penetration and stable equity base. The rating is dependent on the Company’s ability to enhance its market position, gain in terms of assets under management and maintaining strong performance of its funds. Meanwhile, upholding high governance standards and strengthening of risk management is crucial for the rating.

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 (98%). The remaining shareholders include Oman International Development Company (0.84%), Bank Muscat (0.43%) and National Logistic Cell (0.84%).
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 July'19 belonging to all major categories. Pak Oman has four open-end funds under its name, while eight 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.