A Medium to communicate with the Users of Ratings

ISSUE III; February 2014

PACRA INSIGHT

Wednesday, February 12, 2014

Humaira Jamil

• The Insight behind PACRA INSIGHT

• PACRA’s Rating Universe (Product-by-product) – Key Developments & Trends

• Pakistan’s Rating Universe – Snapshot

• Industry View – General Insurance, Microfinance, Power, Refining, Textiles, AMCs, cement

Communicating…….

The Insight behind PACRA INSIGHT

Consolidating Information

Promoting Transparency

There is nothing so terrible as ACTIVITY without INSIGHTJohann Wolfgang Von Goethe

PACRA’s Rating Universe – Key Developments & Trends

Dec10

Jun11 Dec11

Jun12 Dec12

Jun13 Dec13

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

50

100

150

200

250

300

220215

210220

219 218222

FIGURE ISNAPSHOT - PACRA Ratings Composition

(Dec10- Dec13)

Entity Ratings

Instrument Ratings

Mutual Funds (including Asset Managers)

PACRA Opinions (Total)

Rati

ngs

( P

AC

RA

Univ

ers

e S

hare

%)

PA

CR

A U

niv

ers

e-T

ota

l R

ati

ngs

(Nos.

)

220215

210220

219 218222

0

50

100

150

200

250

300

-30

-20

-10

0

10

20

30

Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13

Total PACRA

Opinions (N

os.)

New

(wit

hdra

wn

/ re

deem

ed) R

ating

s (N

os.)

FIGURE IISNAPSHOT - PACRA Ratings Universe Growth

(Dec10 - Dec13)

New ClientsWithdrawals / Redemptions

PACRA’s Rating Universe – Entities

-2

-1

0

1

2

3

4

AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB-B CCC-C

Rati

ng A

ctivi

ty -

upgr

ades

/Dow

ngra

des

(Nos

.)

FIGURE IVEntity Rating Activity across Rating Categories

(For calendar year ended Dec 31, 2013)

Upgrades Downgrades

92 92

93

95

93

95

97

89

90

91

92

93

94

95

96

97

98

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13

Rati

ngs

cate

gory

Sha

re (

%)

FIGURE IIIPACRA Entity Ratings Composition & Growth

(Dec10 - Dec13)

AAA AA ABBB BB - B CCC - CAll Entity Ratings

PACRA’s Rating Universe – Entities

PACRA ENTITY RATING UNIVERSE (Entry / Exit) (For calendar year ended Dec 31, 2013)

Entities Initial L/T

Ratings Withdrawn Entities

Last L/T Ratings

Financial Institutions

1. SME Bank BBB 1. Pak Brunei Investment Company AA

2. The Pakistan General Insurance Company

A- 2. Arif Habib Investments A+

3. Waseela Microfinance Bank BBB+

4. Saudi Pak Insurance Company A-

Corporates

5. Autosoft Dynamics A- 3. Ahmed Fine Textile Mills A-

6. Mangla Metals BBB 4. Hussain Mills A-

7. Kohsar HydroPower BBB 5. FFC Energy A

8 Pakistan Refinery A- 6. Halmore Power Generation Company A

9. Islamabad Electric Supply Company

A+

10. Maple Leaf Cement Factory Limited

BB

PACRA’s Rating Universe – Outlook Analysis

Ratings Outlook Analysis

Positive Negative

Opening @ July 1, 2013 9 6

Translated in Rating Change (-) 1 3

Translated in Outlook Change (-) 2 0

Maintained (+) 5 3

Ratings Not Reviewed (+) 0 0

Withdrawn (-) 1 0

During 1HFY14: New (+) 4 2

Opening @ Jan 01, 2014 9 5

PACRA’s Rating Universe – Instruments

58

5146

49

45 3936

0

10

20

30

40

50

60

70

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13

Ratings (N

os.)

Rati

ngs

cate

gory

Sha

re (

%)

FIGURE VSNAPSHOT - PACRA Instrument Rating Universe Composition

& Growth(Dec10- Dec13)

AAA AAA BBBBB - B CCC - CAll Instrument Ratings

PACRA’s Rating Universe – Instruments

1TBI: To be issued 2CY13 had 15 Instrument Redemptions

PACRA INSTRUMENT RATING UNIVERSE (Entry / Exit)(For calendar year ended Dec 31, 2013)

[Initial ratings] Issuers / Instruments Initial Instrument Ratings  

1. NIB Bank | TFC II: Upto PKR 5,000mln (including a green shoe option of PKR 1,000mln) TFC TBI1 A+  

2. PAIR Investment Company | CP: PKR 500mln CP TBI AA  

3. Bank Alfalah | TFC V: PKR 500mln TFC V issued Feb13 AA-  

4. The Pakistan Water & Power Development Authority | PPTFC2: PKR 9,327mln TFC issued Sept13 AAA  

5. Pakistan Refinery Limited | TFC I: PKR 500mln issued Aug13 A  

6. Pakistan Refinery Limited | TFC II: PKR 500mln issued Aug13 A  

7. Maple Leaf Cement Factory Limited | Restructured Sukuk: PKR 8bln Sukuk restructured Sept12 BB+  

[Withdrawn3 ratings] Issuers / Instruments Last Instrument Ratings  

1. Engro Fertilizers | Sukuk II: PKR 1,500mln TBI A  

PACRA’s Rating Universe – Asset Management Ratings

12

9 9

12 1211 11

0

2

4

6

8

10

12

14

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13

Ratings (N

os.)

Rati

ngs

cate

gory

Sha

re (

%)

FIGURE VIIISNAPSHOT - Asset Manager Ratings Composition

& Growth(Dec10- Dec13)

AM1 AM2AM3 AM4AM5 All Asset Manager Ratings

2831

33

3739 39

42

0

5

10

15

20

25

30

35

40

45

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec10 jun11 Dec11 Jun12 Dec12 Jun13 Dec13

Rati

ngs

cate

gory

Sha

re (

%)

FIGURE IXSNAPSHOT - Fund Stability Ratings Composition &

Growth(Dec11- Dec13)

AAA(f) AA(f) A(f)

BBB(f) Total

27 28

2727

29 2935

0

10

20

30

40

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13

Ratings (N

os.)

Rati

ngs

cate

gory

Sha

re (

%)

FIGURE VIIISNAPSHOT - Mutual Fund Rankings

Composition & Growth (Dec10 - Dec13)

1-star 2-star3-star 4-star5-star All Rankings

Credit Risk – Rise & Fall

A Rise in Credit Risk

EntitiesRatings

New(Action date) Previous Notches

Shaheen Insurance Company

BBB-(01Aug13) A- 3

National Refinery

AA+(23Oct13) AAA 1

Pakistan’s Rating Universe - Snapshot

209 228 223 231 232

172 179 187 188 190

381

407410

419 422

360

370

380

390

400

410

420

430

050

100150200250300350400450

CY09 CY10 CY11 CY12 CY13

Universe Rati

ngs (Nos.)D

CRA

Rati

ngs

(Nos

.)

FIGURE XIPakistan Ratings Universe Growth

(CY09 - CY13 )

PACRA JCR-VIS Universe5

37 43

11 1 07

20

42

16 4 012

57

85

27 5 0

0

20

40

60

80

100

AAA AA A BBB BB - B CCC - C

Rati

ngs

(Nos

.)

FIGURE XPakistan Entity Ratings Universe Compostion in

Rating Categories (As @ Dec 31, 2013 )

PACRA JCR-VIS Universe end-CY13

Pakistan’s Rating Universe – Classes of Ratings

2711

24 2713

24 32 257

21

15

18

46

11

3542

42

20

25

50

75

100Ra

ting

s (N

os.)

FIGURE XIPakistan Ratings Universe Compostion in Rating

Classes(As @ Dec 31, 2013 )

JCR PACRA

UPCOMING:

ISSUE IV; August 2014

Thank You !