PACRA Maintains Asset Manager Rating of JS Investments Limited
The rating incorporates JS Investments Limited's (“JSIL” or the “Company”) sound governance framework, an experienced management team, an adequate investment decision-making process, and a satisfactory control infrastructure. The research and investment functions of the company are considered adequate. To expand its market penetration the company launched 2 new funds; JS Islamic Premium Fund and JS Money Market Fund in Islamic Income and Money Market Categories respectively. The assigned rating also incorporates adequate retail clientele, market penetration, and satisfactory Fund performance. Since Sep'22 the growth momentum of the AMC has depicted an increase of 42.6% and stood at 51bln at the end of Sep'23. While the market share remained at 2.9% at the end of Sep'23. The AUM mix of the AMC depicts an adequate mix of equity and income/money market categories i.e. 7% and 93% respectively. While the top 10 investor concentration stood at 64% at the end of Sep'23. During the period under review, the AUMs of the income/money market category under top quartile and mean quartile representing 20% and 80% respectively. While, the equity category falls under the top quartile with a 4-star ranking. Sustaining the fund performance across all categories along with maintenance of credit quality metrics will remain important for rating, going forward.
On the financial side, the management fee of JSIL has reported PKR 171mln for 9MCY23 (9MCY22: PKR 121.3mln). The equity stood at PKR 1.48bln at end-Sep’23, which is well above the minimum capital requirement of PKR 230mln. On the digital side, JS Bank's App "Zindagi" has also supported the Company in engraving its footprints in digitalization. Furthermore, the Company is in a digital onboarding process for new clients. The rating incorporates the Company's association with JS Bank Limited and potential synergies due to the established presence of JS Group in the financial sector.
The rating is dependent on the management's ability to effectively execute business development plans and leverage its digital initiatives to strengthen its operations and outreach. Sustaining above-average fund performance, increasing market share, and further strengthening the investment process remain key rating factors
JSIL, established in 1995, is listed on the Pakistan Stock Exchange. The Company is part of the Jahangir Siddiqui (JS) Group. JS Bank Limited holds ~85% shareholding in the Company. JS Group has a strong presence in the financial sector with entities operating in the banking, insurance, brokerage, and asset management sectors. The group has recently ventured into energy infrastructure and OMC segments. JSIL possesses licenses for Asset Management, Investment Advisory, Private Equity/Venture Capital, and REIT management.
JSIL’s control vests in the eight-member board of directors including the CEO. There are two independent directors while all other directors except the CEO are non-executive. Assets under the management of the Company are spread across fourteen funds in eleven different Conventional and Shariah Compliant Categories, two voluntary pension schemes, one Exchange Traded Fund, and one dedicated equity fund. The Company had AUMs of PKR 51bln at end Sep'23 (Sep'22: ~PKR 35.8bln).