MCB-AH Corp Presentation Sept 12.pdf

8/14/2019 MCB-AH Corp Presentation Sept 12.pdf

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MCB-Arif Habib Savings and Investments Limited(formerly: Arif Habib Investments Limited)

Corporate Marketing Presentation

September 12, 2013


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Sponsors Profile


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Arif Habib

Corporation Limited Arif Habib Corporation Ltd (formerly: Arif Habib Securities Limited) is theholding company of Arif Habib Group, one of the countrys largestconglomerates.

AHCLs Total Net Worth currently is around PKR 24.68 billion while its TotalAssets stand at PKR 29.97 billion(as of 30th June13)

Winner of KSE-Top 25 Companies award for corporate excellence many times

Group subsidiary companies operate in Brokerage, Commodities, Energysectors while associated companies operate in Microfinance Banking, Fertilizer,Dairy, Cement and Steel sectors. AH group has presence in UAE & Sri Lanka.

Total Group Market Capitalization stands at over PKR 73.936* billion(as of 17th

Sept 13)

* Excluding Thatta Cement which is being divested.


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The Organization


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MCB-Arif Habib Savings

Asset Management, Investment Advisory & Pension Funds ManagementCompany (registered with & licensed by SECP)

Listed on Karachi Stock Exchange with Paid Up Capital of PKR.720 million and equity base of PKR 1.27 Billion

Joint Venture between MCB Bank and Arif Habib Corporation.

MCB Bank holds 51.33%, while Arif Habib Corporation holds 30%.

Current Assets Under Management over PKR 40 billion.

Over 53,000 clients in & outside Pakistan (highest in private sector)

One of the highest ever assigned Management Quality rating of AM2 (byPACRA).


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What sets us Apart?

-1 Firsts by MCB-Arif Habib Savings

Private sector Equity fund in 2002 (PSM), which has delivered an absolutereturn of 1,410.2% since inception (2002), outperforming KSE-100 by262.2% and the only state owned peer fund by a significant margin

Fixed Income Fund in 2002 (PIF), which has consistently outperformed itsbenchmark and most of fixed income avenues/peer funds

Launched countrys first Govt. Bond Fund (MSF-Perpetual) in 2003

Administrative investment plan in 2002 Govt. Bond Fund i.e. MetroBank Pakistan Sovereign Fund in 2003 Introduced countrys first AAA rated Money Market Fund (i.e. PCF) Introduced countrys first Index Tracker Fund based on an index provided by

an international indices provider (i.e. Arif Habib Dow Jones SAFE PakistanTitans 15 Index Fund-AHDJPF)

First AMC to launch ATM withdrawal facility in 2004 First AMC to introduce web based e-statements for clients First AMC to introduce monthly Fund Managers reports and daily NAV by

sms First one to initiate video FMR and webinar


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Core management team intact since long (key management consists oflong-serving MCBAH & MCBAMC employees)

High performance culture

Performance of our Pension Funds and MCB Dynamic Stock Fund rankedamong the worlds top 100 funds in 2012 according to an independentstudy

Many best practices at MCBAH became part of NBFC & NE regulationsenacted by SECP

Largest product range (Funds/investment plans) catering to all segments

What sets us Apart?

-2


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Mission & Vision

Our Mission

To become a preferred Savings and Investment

Manager in the domestic and regional markets,

while maximizing stakeholders value

Our Vision

To become synonymous with Savings


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Board of Directors

Mian Mohammad Mansha Chairman

Mr. Nasim Beg - Executive Vice Chairman

Mr. Yasir Qadri, Chief Executive Officer & Director

Dr. Salman Shah Director

Mr. Haroun Rashid Director Mr. Ahmed Jahangir Director

Mr. Samad A. Habib Director

Mirza Mahmood Ahmad - Director


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Key Management

Name Designation Total Experience

(yrs)

Experience in

industry (yrs)

Mr. Yasir Qadri Chief Executive Officer 15 11

Mr. Saqib Saleem, ACA SVP- COO & Company Secretary 13 9

Mr. Kashif Rafi SVP-Head of Fixed Income 15 11

Mr. Tanweer Ahmad

Haral

SVP-Head of Sales & Marketing 17 8

Mr. Muhammad Asim,

CFA

VP-Head of Equities 8 6

Mr. Umair Ahmed, ACA VP CFO , Head of Fund

Accounting & Special Mandates

10 5

Syed Asif Mehdi, ACA VP-Head of Internal Audit &

Compliance

14 8

Mr. Jamshed A. Khan VP- Head of Investment Advisory 14 7

Mr. Arif Maniar VP-Head of Corporate Sales (South) 26 8

Mr. Yousuf Durvesh VP-National Business Manager

(Direct Retail channel)

35 8

Mr. Mohsin Pervaiz VP-Investments 20 10


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Our Investment Philosophy

We believe in a comprehensive top-down

fundamental approach, which, harnessedby our in-house research process, canprovide superior risk-adjusted returns.We believe in focusing our portfolio in themost attractive investment ideas so as tocreate value for our investors.

Macroeconomic Environment Asset Classes

Microenvironment Instruments

Major Investment Valuation Models IncludeAbsolute Valuation and Relative ValuationTechniques using PE, PBV, Dividend Yield,Earning Yield, RI, EVA , MVA and DCF (useddominantly) using FCFE, FCFF & DDM, DDDM

Macroeconomic view on the Country

Monitor Sector Fundamentals

Select instruments based on

fundamental analysis

Keep Benchmark in

mind, but take

aggressive overweight

or underweight

positionsbased on view


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Performance In The Rough


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Performance in the Rough

Equity

Our Performance in Times of High Volatility Representative Asset ClassFunds. While global market volatility on the rise since 2007, our stock marketrelated funds have consistently outperformed broad indices as well as peerfunds.

Equity Markets Crash of 2008 and Rebound

Local Equity Market peaked in April 2008 at record index level of 15,600 andmade a low of near 4,800 afterwards. Since then market has recovered someof its losses and its new recovery peak has been seen recently at around11,200 in Nov-2010. MCB Stock Fund during the crash phase, remainedamong the lowest burnt while also remained among the top funds in recoveryas well. Performance during this path from 2008 peak to recovery until

November 2010 demonstrates our fund management capability relative toour benchmark and peers in the industry and is being illustrated on thefollowing graphs & statistics.


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Long-Term Performance of flagship Equity FundsPakistan Stock Market Fund has generated a total return of 1282.2% in last ten &half years outperforming KSE-100 by significant margin of 198.8%, while DynamicStock Fund has been able to outperform its benchmark by staggering 174.1% sinceits inception

Equity Funds vs. Indices

Absolute return over

past 365 days

(as on Aug 29, 2013)

Total Return

(since the funds inception)

Pakistan Stock Market Fund

(Inception: March 11, 2002) 133.7% 1282.2%

KSE-100 98.9% 1083.4%(since PSM inception)

MCB Dynamic Stock Fund

(Inception: March 01, 2007) 200.3% 196.9%

KSE-30 23.1% 22.8%

(since DSF inception)

Long-term Performances

Equity


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Equity Funds Returns 18-Apr-08 till 26-Jan-09

-46%

-53%

-56%

-60%

-63% -63% -64% -64%-65%

-66%

-68%-68%

-69%

-71%

-75%-76.0%

-71.0%

-66.0%

-61.0%

-56.0%

-51.0%

-46.0%

HBLSF

APSF

PSMF

MCB-DSF

AKDOF

MIF

NIT

CDF

USAF

KASBSF

ASMF

AKDITF

KSE-100

NSF

UTPA30+F

KSE-30

Returns

Relative Performance in The Stock Market Crash of 2008


Equity


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Equity Funds - Performance in Recovery After Worst Period ofStock Market

Equity Funds Returns 26Jan-09 till 18-Dec-09125%

120%

96%

91%

87%

82%

80% 80%

77%

73%71%

68%66%

61%

113%

118%

108%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

110.0%

120.0%

UTPA30+F

ASMF

KSE-30

MCB-DSF

MIF

USAF

KSE-100

KASBSF

PSMF

IGISF

AKDOF

AGAF

CDF

NSF

AKDITF

NIT

HBLSF

Returns

Performance in Recovery

Equity


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Equity Funds - Performance in the complete cycle of marketcollapse and recovery (April 2008 to Feb 2011)

Performance in

Complete Cycle

Equity

11.00%

8.45%

-2.03%

-4.90%

-10.46%

-21.37%

-24.26%

-24.53%

-27.87%

-2

9.47%

-36.12%

-38.49%

-50.00%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

HBLSF

MCB-DSF

ASMF

PSMF

USAF

KSE-100

AKDOF

CDF

KASBSF

NIT

NSF

KSE-30


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Fixed IncomeFixed Income Markets Corporate Credit Weakening

Debt Markets in Pakistan though are insulated from Credit Crises that emergedin the leading economies in the form of Collapse of CDOs and Sub-PrimeMortgage, however corporate bonds felt the heat because of challenges on bothmacro and micro economic levels . Majority of Fixed Income Funds beinginvestors of Corporate Bonds (TFCs) faced severe write downs and losses.Naturally, allocation to Weaker Credit Quality Institutions was penalized bymarket in terms of falling Bond Prices. Where price discovery hindered, regulatorenforced mandatory provisioning requirements.

On Nov 04, 2008 SECP (Apex regulator) forced Fixed Income Funds to makemandatory provisions according to the credit quality buckets.

The TFC crises that began in Oct-08 continued to affect the performance in thedays to come. Around the same quarter, credit placements for stock marketinvestors (suspended subsequently by the regulator) also tainted the portfolioperformance. On the following pages a snapshot of our relative performance

since Oct-2008 (when heat began to threaten fixed income markets) toNovember 2010 also highlights our ability to sail through turbulent times


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Long-Term Performance of flagship Income FundsMCB Dynamic Cash Fund, the fixed income fund managed by MCB AMC and PakistanIncome Enhancement Fund (PIEF) managed by MCB-Arif Habib Savings were among the

least burnt funds due to these provisioning requirements.

Fund

Absolute return over

past 365 days

(as on Aug 29, 2013)

CAGR

(since the funds

inception)

MCB Dynamic Cash Fund(Inception: March 01, 2007) 14.1% 10.5%

Pakistan Income Fund(Inception: March 11, 2002) 12.7% 10.2%

Long-term Performance

Fixed Income


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Products & Services


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Debt based Open-End

Mutual FundsFunds Category wise

Money Market Funds Pakistan Cash Management Fund is the countrys first AAA(f) rated Fund based on Treasury Bills

only (AUM Rs. 3.175 billion, inception: 20th March 2008). CAGR 10.8%. MCB Cash Management Optimizer is a flexible Money Market Fund rated: AA+(f) (AUM Rs. 12.76

billion, inception: 1st October: 2009). CAGR 10.6%. Both Funds are eligible as collateral against KSE exposure and for bank guarantees

Income Funds Countrys first income scheme, Pakistan Income Fund is the only Income fund eligible for statutory

reserve requirements for insurance companies (AUM Rs.1.029 billion, inception 11th March 2002).CAGR since inception 10.2%.

MCB Dynamic Cash Fund is one of markets least volatile income fund with over 50% retailinvestors (AUM Rs. 10.437 billion, inception: 1st March 2007). CAGR 10.5%.

Metrobank-Pakistan Sovereign Fund (Perpetual), first Govt. Bond Fund of the countryoutperformed peer funds this year too with a big lead (AUM Rs. 1.099 billion, inception: 1st March2003). CAGR 6.8% since inception, 4.1% p.a. return since July 2013.

Aggressive Income Fund Pakistan Income Enhancement Fund ranks among markets best performing aggressive income

schemes (AUM Rs. 1.255 billion, inception 28th August 2008). CAGR 11.8%.


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Open-End Equity Mutual

FundsFunds Category

Equity Funds MCB Dynamic Stock Fund had the distinction to be the only equity fund awarded 5-Star

ranking by PACRA for two consecutive times 2010-2011. MCB-DSF has generated YTD13return of 3.9% and 196.9% since inception (AUM Rs. 0.966 billion, inception 1st March2007). This fund has been rated among 100 best performing equity funds of the world in2012 with 54.6% return for the year 2012.

Pakistan Stock Market Fund, has an 11 year performance history with big lead over KSE-100 & NI(U)T, is the only equity fund eligible for statutory reserve requirement forinsurance companies. Has delivered absolute return of 1,282.2% since inception.(AUM Rs.1.204 billion, inception 11th March 2002)

Pakistan Premier Fund has an accomplished return track record (converted from closedend to Open end) outperforming KSE-100 by 99% since inception (AUM Rs. 0.560 billion,inception 1st January 2003). YTD13 return 13.6%

Pakistan Strategic Allocation Fund, another successful equity fund is based on aquantitative model. PSAF was converted from closed end to Open end in 2010 (AUM Rs.0.324 billion, inception 11th September 2004). YTD13 return of 6.5%.


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Open end Hybrid

Mutual FundsFunds Category wise

Balanced Fund Pakistan Capital Market Fund converted form closed end to Open end Fund is a leading

Balanced Fund by achieving an absolute YTD13 return of 3.4% and 261.7% sinceinception (AUM Rs. 0.414 billion, inception: 24th January 2004)

Asset Allocation Fund

MCB Dynamic Allocation Fund has generated an absolute YTD13 return of 1.0% and23.7% return since inception (AUM Rs. 0.590 billion, inception 17th March 2008)

Pension Fund (VPS) - conventional Pakistan Pension Fund (conventional) was introduced in 2007 under Voluntary Pension

System Rules, 2005. PPF has 3 sub Funds (Money Market, Debt & Equity). Investor canchoose from 10 different allocation plans. Well structured Income Payment Plan caters topost retirement needs (AUM Rs.0.428 billion, inception 29th June 2007). Equity pool of this

fund has been rated among 100 best performing equity funds of the world in 2012 with 60%return.

Investment Plans A number of investment & saving plans designed to meet unique investment needs of

almost everyone


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Islamic Funds

(shariah compliant)

Islamic Income Fund MCB Islamic Income Fund is being managed like a Govt. Sukuk Fund with almost Zero

credit risk (AUM Rs.2.648 billion, inception: 20th June 2011). CAGR 9.5% since inception.Dr. Muhammad Zubair Usmani is the Funds Shariah advisor.

Islamic Asset Allocation Fund Pakistan International Element Islamic Fund is one of the very few funds allowed to

invest abroad. (AUM Rs. 0.244 billion, inception: 2nd May 2006). Funds Shariah counsel

is chaired by Justice (Retd.) Mufti Muhammad Taqi Usmani. YTD13 return of 3.4% and93.8% return since inception.

Islamic Pension Fund (VPS) Pakistan Islamic Pension Fund (Shariah compliant) was introduced in 2007 under

Voluntary Pension System Rules, 2005. PIPF has 3 sub Funds (Money Market, Debt &Equity). Investor can choose from 10 different allocation plans. Well structured IncomePayment Plan caters to post retirement needs (AUM Rs. 0.244 billion, inception 15th

November 2007). Funds Shariah counsel is chaired by Justice (Retd.) Mufti Muhammad

Taqi Usmani. Equity pool of this fund has been rated among 100 best performing equityfunds of the world in 2012 with 55% return.

We manage two Voluntary pension Funds (conventional and Islamic both) since 2007being one of the first four licensees


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Voluntary Pension Schemes

VPS is a private Defined Contribution Pension scheme under Securities and ExchangeCommission of Pakistans (SECP) enacted VPS Rules, 2005. This scheme was declared oneof the best private pension structure in the world by World Bank team. MCBAH is one ofthe few Asset Management Companies licensed by the SECP to manage this scheme.Members of our board were among the major proponents and architects of this scheme.

Though VPS is still in its initial stage of popularity, we are proud to be one of the top

performing Pension funds with more than 550 retail accounts.

Separate, Independent Trustee & Custodian to look after the investors' interest

Voluntary systematic flexible saving cum investment plans

Choice between 6 different Conventional & Islamic plans (MCBAH is the only AMC

that offers two additional Life-cycle plans)

Tax Advantages tax credit/rebate, tax free gains/profits as well as tax freecommutation of 50% accumulated fund at the time of retirement from scheme,

retirement income also tax free (if invested for at least 10 years in VPS). Withdrawal

of PF balances transferred to VPS also made tax exempt in latest Finance bill 2013.

After Retirement: Option between Income Drawdown plan & Annuities


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Investment Advisory/Portfolio

Management ServicesOur specialized portfolio management product Portfolio Asset and Liability Management

Services (PALMS) draws upon our teams research and fund management acumen to deliver bestresults for clients portfolios within the parameter of their defined investment policy. Ideallysuited to management of employee benefit funds of large organizations.

` We currently manage aggregate portfolio size of over Rs. 4.165 billion in 12 Special mandates

Licensed by the Securities and Exchange Commission of Pakistan (www.secp.gov.pk)

Separate, Independent Trustee & Custodian to look after the investors' interest

Complete back-office service with periodic performance reporting (optional)

Specific to employee benefit funds: Customized/cost effective investment solution for Provident/Gratuity/Superannuation funds

Analyzing risk appetite and determining asset allocation based on factors like employees'average age, increments, historic retention, inflation, interest rates, etc.

Hassle-free loans and final settlements administered by us

Individual employees' statements through unitization of the pool

Performance based Advisory Fee structure


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Pakistans Asset

Management Industry

Similar to many regional markets, Asset Management remained mainstay

of Public Sector until the mid 90s when private sector AMCs began with

the launch of Closed End Funds

Inflection point for Growth of Private Sector AMCs coincided with the start

of Golden Phase for Domestic Economic Growth in 2002-03 & Industry

continued to growth faster than Domestic Economic Growth Private sector now adds over 85% to the total industry size of Rs. 330

billion

The Industry comprises over 30 Asset Management Companies and 140

plus funds

30-Jun 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012AUMS In

Billion Rs. 31 40 83 154 200 252 473 466 239 222 260 330

No. of Open

End Funds 2 4 13 17 19 23 49 67 81 105 132 140


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Presented by:Tanweer Ahmad Haral

Head of Sales & Marketing

[email protected]

MCB-AH Corp Presentation Sept 12.pdf

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