JCR-VIS Credit Rating Company Limited has upgraded the Management Quality Rating of PICIC Asset Management Company Limited (PICIC AMC) from ‘AM3+’ (AM-Three Plus) to ‘AM2-’ (AM-Two Minus). Outlook on the rating is ‘Stable’.
PICIC Asset Management Company manages two of the largest closed-end equity funds in the market; the overall performance of these funds is affected by a sizeable portion of frozen shares in their portfolios. On ex-frozen basis, returns were comparable to the benchmark in FY12 as also in the preceding year. Performance of recently launched open end stock fund is reflective of active management; PICIC Stock Fund has outperformed the benchmark in FY12, while also posting above average return in relation to peers. Returns of both income and money market fund feature in the top quartile in their respective categories. While credit risk emanating from the portfolio holdings of these funds is largely similar, risk profile is differentiated in terms of interest rate risk that may be assumed by these funds. The company plans to launch three Islamic funds in the near term to achieve a basic product suite.
Organizational infrastructure has been strengthened and vacancies created at senior management level in the recent past have largely been filled from within the organization, ensuring continuity of policies. The company is run by an able management team. The risk & compliance infrastructure is being further strengthened, with the planned hiring of additional resources. In-house research capabilities are considered adequate. The company has launched investment advisory services; in addition to tapping institutional clients locally, the company is also marketing its services to investors abroad. Some changes in reporting lines are planned in lieu of this while development of comprehensive policy infrastructure to ensure protection of clients’ interests is considered important.
While the size of in-house sales team is limited, the company expects to utilize the branch network of NIB Bank Limited in a more effective manner, going forward, with greater buy-in from the bank’s management on cross sell opportunities. In this respect, a comprehensive plan is in the process of being developed, to be presented to the Board. Moreover, tie ups with foreign firms are also being explored to market the company’s products abroad.