KENANGA ISLAMIC INVESTORS BERHAD - 2023 |
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| Report ID | 60538900469634 | Popularity | 123 views 9 downloads | |||||
| Report Date | Dec 2023 | Product | ||||||
| Company / Issuer | Kenanga Islamic Investors Bhd | Sector | Finance | |||||
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| Rationale |
Rating action MARC Ratings has affirmed its investment manager rating (IMR) of IMR-2 on Kenanga Islamic Investors Berhad (KIIB). Rationale The rating reflects KIIB’s well-established investment management process, supported by a prudent risk management framework that is sufficient for its relatively small size. KIIB is a wholly-owned subsidiary of Kenanga Investors Berhad (KIB), and is the islamic fund management arm of Kenanga Investment Bank Berhad (KIBB). With a mandate solely focusing on Shariah-investment management services, KIIB is a relatively small asset manager in Malaysia with assets under management (AUM) of RM2.8 billion. This translates to an approximately 1.3% share of Shariah-compliant AUM in Malaysia as at end-June 2023. KIIB manages unit trust funds delegated to the company by its parent, KIB. As at end-June 2023, the funds are mainly invested in traditional asset classes, with equity funds constituting the majority of total AUM at 73.2%, followed by money market funds (14.5%), fixed income (11.0%) and balanced funds (1.3%). Over the same period, retail unit trust funds made up 79.7% of KIIB’s total funds. KIIB leverages on the infrastructure and resources of KIB. KIIB’s personnel are mostly shared resources of KIB. These include KIB’s pool of investment personnel. Staff are skilled, with investment professionals typically having more than 10 years of experience in the fund management field. In terms of risk management, KIIB adopts the governance and risk management framework of its parent, supported by an information system that allows for key risk assessments including stress tests, value-at-risk (VaR) calculations and back-testing of investment portfolios. We assess KIIB’s investment management process as robust, with well-structured and consistent practices. Investment strategies are backed by bottom-up analysis for equity funds and both bottom-up and top-down approaches for fixed income funds. Investment strategies are supported by reliable investment and risk analytics systems. The company’s trading and backroom activities are highly automated using Bloomberg AIM and PORTIA systems, which allow for timely investment decision-making. KIIB’s revenue increased to RM1.16 million in 1H2023 as AUM improved 14.9% y-o-y to RM2.8 billion. The company, however, posted a loss of RM0.43 million over the same period as higher expenses offset the growth in revenue. In terms of fund performance, we note that most of KIIB’s funds had outperformed their respective benchmarks. Key rating factors
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