Asset Management Industry Sector Presentation Apr PDF Free Download

Asset Management Industry Sector Presentation Apr 2014

Back to the Basics Asset Management Company (AMC) A company that invests its clients' pooled fund into securities mainly through mutual funds that match its declared financial objectives. Mutual Fund An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Assetsunder Management t(aum (AUMs) The market value of assets that an AMC manages on behalf of investors. Net Assets Value (NAV) Aclosed-end mutual fund's price per share or open-end fund's per-share value. Return Change in the fund s NAV over time. Overview Global Industry Regional Industry Domestic Industry

Types of Mutual Funds in Pakistan Sr. Fund Category Investment Avenue Minimum Rating 1 Equity Scheme Minimum 70% allocation in equities Not Applicable 2 Balanced Scheme 30%-70% assets invested in equities A- 3 Asset Allocation Scheme As per the Offering Document of the Fund Not Applicable 4 Fund of Funds Scheme Invest in net assets of other schemes Not Applicable 5 Islamic Schemes For all respective fund categories A- 6 Capital Protected Fund 7 Index Tracker Scheme 8 Money Market Scheme 9 Income Scheme 10 Aggressive Income Scheme As per the Offering Document of the Fund Atleast 85% of net assets in the index selected Money market government securities and placements Corporate Debt instruments, government securities and placements with 25% allocation in Cash & TDRs Corporate Debt instruments, government securities and placements with 10% allocation in Cash & TDRs Not Applicable Not Applicable AA Not below investment grade Not Applicable 11 Commodities Atleast 70% of net assets in the Not Applicable commodities/commodities future Overview Global Industry Regional Industry Domestic Industry

Asset Manager Grading Rating Services Mutual Fund Performance Ranking Star Ranking Fund Stability Rating Capital Protection Rating Overview Global Industry Regional Industry Domestic Industry

Overview Global Industry Regional Industry Domestic Industry

Top10 Asset Managers USD Trillion Sr. Asset Manager Country CY12 CY13 Growth 1 BlackRock U.S. 3.8 4.3 14.0% 2 Vanguard Group U.S. 2.2 2.9 31.8% 3 Allianz Group Germany 24 2.4 24 2.4 00% 0.0% 4 State Street Global U.S. 2.1 2.3 10.2% 5 Fidelity Investments U.S. 1.9 1.9 2.9% 6 Bank of New York Mellon U.S. 1.4 1.6 15.5% 7 AXA Group France 1.5 1.5 4.4% 8 J.P. Morgan Chase U.S. 1.4 1.5 4.8% 9 BNP Paribas France 1.3 1.2-7.3% 10 Deutsche Bank Germany 1.2 1.2-3.8% Total 19.3 21.0 8.9% Top10 / Global AUMs 31% Overview Global Industry Regional Industry Domestic Industry

Overview Global Industry Regional Industry Domestic Industry

Top Indexes Performance CY13 Region Country Index Return Americas USA Standard & Poor's 500 40.5% Americas USA Dow Jones Industrial Average 37.2% Americas USA NASDAQ 100 46.4% Americas Brazil Sao Paulo SE Bovespa Index -20.4% Europe Luxembourg LuxX Index 16.3% Europe France CAC 40 33.3% Europe Germany DAX Index 41.7% Asia Australia S&P/ASX 200 14.9% Asia Japan Nikkei 225 40.0% Asia China CSI 300 3.1% Ai Asia Idi India BSE Sensex 30 52% 5.2% Asia India National Stock Exchange CNX Nifty Index 6.2% Asia Pakistan KSE 100 49.4% Africa South Africa FTSE/JSE Africa All Share Index 17.5% Overview Global Industry Regional Industry Domestic Industry

Overview Global Industry Regional Industry Domestic Industry

Investors Mix Indian Mutual Fund Industry Indian Rupee 'mln Money Market Income Investor Sep 12 Mar 13 Sep 13 Sep 12 Mar 13 Sep 13 Banks/FIs 200,312 105,256 74,185 52,340 338 45,379 Corporates 1,220,466 749,867 1,045,462 1,899,555 49,675 2,390,575 FIIs 9,308 6,407 10,697 22,730 312 7,503 High Networth Individuals 57,282 57,522 141,365 1,299,904 26,093 1,513,373 Retail 12,214 12,680 23,698 251,731 4,324 289,008 Total 1499581 1,499,581 931,731 1295407 1,295,407 3526259 3,526,259 80,742 4245837 4,245,837 Indian Rupee 'mln Equity Others Investor Sep 12 Mar 13 Sep 13 Sep 12 Mar 13 Sep 13 Banks/FIs 20,590 17,443 13,172 1,030 45,716 660 Corporates 176,069 156,641 147,847 87,915 2,292,267 81,589 FIIs 13,242 28,113 25,826 1,872 16,964 651 High Networth Individuals 361,581 337,366 349,712 100,975 1,515,153 86,861 Retail 1,301,535 1,186,955 1,087,934 134,612 415,849 124,191 Total 1,873,016 1,726,518 1,624,491 326,405 4,285,948 293,952 Indian Rupee 'mln Total Investor Sep 12 Mar 13 Sep 13 Banks/FIs 274,272 168,753 133,395 Corporates 3,384,006 3,248,449 3,665,473 FIIs 47,152 51,796 44,678 High Networth Individuals 1,819,742 1,936,133 2,091,311 Retail 1,700,091 1,619,808 1,524,830 Total 7,225,261 7,024,939 7,459,687

Top10 AMCs Indian Mutual Fund Industry AMC Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Total Mkt.sh Total Mkt.sh Total Mkt.sh Total Mkt.sh Total Mkt.sh HDFC Mutual Fund 1,013,925 12.89% 1,017,203 12.46% 1,049,768 12.40% 1,030,463 12.75% 1,089,901 12.43% Reliance Mutual Fund 906,358 11.52% 945,802 11.58% 977,714 11.55% 932,493 11.54% 1,024,872 11.69% ICICI Prudential Mutual Fund 813,942 10.35% 878,351 10.76% 916,949 10.83% 851,743 10.54% 971,909 11.09% Birla Sun Life Mutual Fund 768,898 9.78% 770,464 9.43% 797,608 9.42% 772,562 9.56% 849,983 9.70% UTI Mutual Fund 706,381 8.98% 694,504 8.50% 747,067 8.82% 700,570 8.67% 743,512 8.48% SBI Mutual Fund 533,113 6.78% 549,054 6.72% 591,632 6.99% 587,059 7.26% 645,607 7.37% Franklin Templeton Mutual Fund 408,686 5.20% 415,643 5.09% 417,220 4.93% 436,882 5.40% 442,576 5.05% IDFC Mutual Fund 300,019 3.81% 328,860 4.03% 389,376 4.60% 395,354 4.89% 412,477 4.71% Kotak Mahindra Mutual Fund 317,728 4.04% 353,614 4.33% 372,030 4.39% 348,063 4.31% 357,578 4.08% DSP BlackRock Mutual Fund 308,376 3.92% 323,423 3.96% 330,412 3.90% 304,857 3.77% 326,415 3.72% Others 1,788,010 22.73% 1,889,654 23.14% 1,876,991 22.17% 1,722,906 21.32% 1,900,626 21.68% Total (INR mln) 7,865,436 8,166,572 8,466,766 8,082,953 8,765,456

Top10 Funds Indian Mutual Fund Industry Sr. Fund Total Return 1 ICICI Pru Exp&Other Services 46.1% 2 Franklin Smaller Cos 34.8% 3 Axis Long Term Equity Fund 34.6% 4 Mirae Emerging Bluechip Fund 32.9% 5 ICICI Pru Dynamic Plan 28.0% 6 Tata Ethical Fund 24.1% 7 Birla Sun Life Top 100 23.5% 8 UTI MNC Fund 23.5% 9 ICICI Pru Top 100 Fund 23.4% 10 Birla Sun Life MNC Fund 23.3%

Market Share AMCs Pakistan Mutual Fund Industry AMC Rating Rater Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Total Mkt.sh Total Mkt.sh Total Mkt.sh Total Mkt.sh Total Mkt.sh Growth Meezan AM2 JCR-VIS 41,011 11.3% 42,309 11.4% 46,077 11.9% 46,639639 12.2% 2% 48,020 11.6% 17.1% 1% NAFA AM2 PACRA 48,891 13.5% 50,629 13.6% 45,155 11.7% 43,911 11.5% 41,805 10.1% -14.5% MCB-AH AM2 PACRA 35,786 9.9% 36,673 9.9% 36,167 9.4% 35,993 9.4% 39,080 9.5% 9.2% UBL AM2 JCR-VIS 33,870 9.3% 35,288 9.5% 33,893 8.8% 32,249 8.4% 36,219 8.8% 6.9% Allied AM2 JCR-VIS 16,656 4.6% 20,678 5.6% 21,231 5.5% 22,687 5.9% 25,269 6.1% 51.7% NIT AM2- PACRA 76,504 21.1% 73,526 19.8% 81,018 21.0% 76,899 20.1% 86,620 21.0% 13.2% PICIC AM2- JCR-VIS 15,985 44% 4.4% 16,918 46% 4.6% 20,487 53% 5.3% 18,586 49% 4.9% 22,688 55% 5.5% 41.9% HBL AM2- JCR-VIS 14,845 4.1% 13,102 3.5% 13,070 3.4% 18,917 4.9% 21,524 5.2% 45.0% JS AM2- JCR-VIS 12,249 3.4% 8,871 2.4% 9,546 2.5% 11,877 3.1% 12,703 3.1% 3.7% Atlas AM2- PACRA 8,526 2.4% 16,743 4.5% 17,475 4.5% 11,162 2.9% 12,666 3.1% 48.6% Askari AM3+ PACRA 9,458 2.6% 8,567 2.3% 10,231 2.7% 10,060 2.6% 10,187 2.5% 7.7% Lakson AM3+ PACRA 12,175 3.4% 12,268 3.3% 13,267 3.4% 10,578 2.8% 10,147 2.5% -16.7% Faysal AM3+ JCR-VIS 6135 6,135 17% 1.7% 6,638638 18% 1.8% 5,335 14% 1.4% 7181 7,181 19% 1.9% 8236 8,236 20% 2.0% 34.2% BMA AM3+ PACRA 1,233 0.34% 1,043 0.3% 1,028 0.3% 1,132 0.3% 1,266 0.31% 2.68% Primus AM3 PACRA 3,086 0.9% 3,723 1.0% 7,008 1.8% 8,321 2.2% 9,218 2.2% 198.7% Habib AM3 PACRA 4,619 1.3% 3,885 1.1% 3,708 1.0% 5,230 1.4% 6,086 1.5% 31.8% Alfalah (incl IGI) AM3 PACRA 10,219 2.8% 9,997 2.7% 10,092 2.6% 10,233 2.7% 9,839 2.4% -3.7% KASB AM3 JCR-VIS 2,733 0.8% 2,666 0.7% 2,611 0.7% 2,580 0.7% 2,890 0.7% 5.7% AKD AM3- JCR-VIS 2642 2,642 07% 0.7% 2,709 07% 0.7% 3,608 09% 0.9% 3710 3,710 10% 1.0% 4037 4,037 10% 1.0% 52.8% Pak Oman AM3- JCR-VIS 2,010 0.6% 1,884 0.5% 1,972 0.5% 1,839 0.5% 1,787 0.4% -11.1% National AM3- JCR-VIS 914 0.3% 832 0.2% 1068 0.3% 931 0.2% 1049 0.3% 14.8% Safeway AM4+ JCR-VIS 1,707 0.5% 1,881 0.5% 2,339 0.6% 2,128 0.6% 1,691 0.4% -0.9% First Cap AM4+ PACRA 289 0.08% 301 0.1% 333 0.1% 271 0.1% 274 0.07% -5.19% Dawood --- --- 1,068 0.3% 0 0.0% 0 0.0% 0 0.0% 0 0.0% -100.0% Total (PKR mln) 362,611611 371,131131 386,719 383,114 413,301301 14.0%

Top10 Funds Pakistan Mutual Fund Industry Sr.# Fund Total Return 1 Golden Arrow Selected Stocks Fund 75.7% 2 JS Large Cap Fund 64.6% 6% 3 National Investment Trust 64.4% 4 JS Growth Fund 64.2% 5 Safeway Mutual Fund 63.4% 6 Asian Stocks Fund 61.8% 7 AKD Opportunity Fund 61.6% 8 Crosby Dragon Fund 53.7% 9 PICIC Stock Fund 51.4% 10 PICIC Investment Fund 51.3%

Regulatory Environment Tax Structure Clientele Cash Dividend Capital Gains (<12M) Capital Gains(>12M) Banks 25% 35% 10% Corporate/NBFI 10% 10% 0% Rtil Retail 10% 10% 0% Minimum Equity Requirement Form of Business Minimum i equity requirement for fresh license Timeline Jun-10 Jun-11 Jun-12 Asset Management Services PKR200mln PKR100mln PKR150mln PKR200mln Services PKR30mln PKR30mln PKR30mln PKR30mln

Key Developments Launch of Commodity Funds Outsourcing of fback-office operations approved by the SECP Increased focus on Investment Advisory through SMAs Launch of Capital Preservation funds based on CPPI methodology

Risks & Opportunities Removal of Tax Arbitrage Continuous support from regulator Retention of quality human resource Increase retail investor awareness Limited financial capability to invest in operating platform Enhanced focus on investment advisory to tap HNW Attractive rates of national savings schemes es Innovation o in product development

Analysts Rai Umar Zafar +92 42 3586 9504 rai.umar@pacra.com Muhammad Siddiq +92 42 3586 9504 muhammad.siddiq@pacra.com Suffiyan Saleem +92 42 3586 9504 Suffiyan.saleem@pacra.com DISCLAIMER PACRA has used due care in preparation of this document. Our information has been obtained from sources we consider to be reliable but its accuracy or completeness is not guaranteed. The information in this document may be copied or otherwise reproduced, in whole or in part, provided d the source is duly acknowledged. d The presentation tti should not be relied upon as professional advice.