Lahore, August 06, 2021 (PPI-OT):The assigned rating reflects modest positioning of AWT Investments Limited (“AWTIL” or the “Company”). The prominent business acumen of the sponsor bodes well for the rating. The rating is supported by a structured investment process, sound governance structure, proficient and qualified management. The Company is also strengthening its foot prints in the competitive investment advisory domain, The management is also planning to diversify its product slate by launching hybrid REIT schemes and private equity funds. The AUMs’ profile of the Company remained stagnant with average market share ~0.2% during FY21.
The retail clientele under SMA portfolio constitutes ~68% reflecting granularity. The association of SMA spans an average from 1 year to 3 years, while the portfolio mainly comprises of discretionary SMAs. Since Jun’20, the Company have shown a healthy growth of ~100% in SMA portfolio. The Company is in the process of completion of an in-house owned Software Solution for the Investment Advisory business which will further solidify its position in the market. Previously, the Company is in losses on account of declining management fee, but over the time, the fee has been improved on the account of advisory business, the Company has reported a net profit of ~PKR 5.4mln in Mar’21 (Jun’20: ~PKR -39mln).
The Company’s equity stood at ~PKR 233mln at end Mar’21. The conversion of losses to profits is itself indication of efficiency of management and its commitment to bolstering bottom-line. The rating is dependent on the Company’s ability to strengthen its market position. At the same time, stability in key human resource, structured improvement in risk management framework and success of initiatives to increase retail AUM will remain crucial for the rating.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com