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Fitch Affirms SCB Asset Management at 'Excellent(tha)'
July 13, 2017 / 10:47 AM / a month ago

Fitch Affirms SCB Asset Management at 'Excellent(tha)'

(The following statement was released by the rating agency) BANGKOK, July 13 (Fitch) Fitch Ratings (Thailand) Limited has affirmed Thailand-based SCB Asset Management Co., Ltd's (SCBAM) National Investment Management Quality Rating (IMQR) at 'Excellent(tha)'. The Outlook is Stable. KEY RATING DRIVERS SCBAM's National IMQR is driven by its robust investment process, exceptional investment resources and multi-layered risk controls. The rating also reflects the asset manager's sound investment performance, strong investment-management franchise and systematic communication with mutual, private and provident fund investors. SCBAM has consistently implemented its medium-term objective of gravitating to multi-strategy asset-allocation funds while consolidating its leading market position in the private-fund segment. Its investment offerings demonstrate depth and breadth, with high product sophistication relative to industry peers. SCBAM's 'Excellent(tha)' rating is based on the following category scores: Investment process: Strong Investment resources: Excellent Risk management: Excellent Investment performance: Consistent Company and client servicing: Excellent National IMQRs are assigned on a descriptive scale based on Fitch's assessment of the asset manager's investment capabilities and the strength of its operational platform. Asset managers are rated 'Excellent', 'Strong', 'Proficient', 'Adequate' and 'Weak', relative to the standards applied by institutional investors in the relevant national market. Asset managers in the 'Excellent' national scale category demonstrate an operational framework that Fitch considers superior relative to domestic institutional standards. Investment Process SCBAM's investment process is deemed robust relative to the industry. This is driven by the asset manger's documented portfolio reviews, in-depth research and disciplined buy-and-sell process that is overseen by an investment committee. There is now greater stability in the firm's equity investment process after several years of refinement. Investment Resources SCBAM's investment resources exhibit an exceptional degree of industry experience, functional segregation, limited key-man dependence and well-balanced portfolio manager profiles. Staffing numbers and experience are consistent with the firm's coverage, backed by clear portfolio-management responsibilities and a variety of data sources. The asset manager's investment teams are extremely well-organised and have high levels of collective and individual investment-management experience. Past senior-level turnover has been accompanied by timely replacements. Its front and middle- to back-office systems are highly automated and integrated, with evidence of top-notch functionality, scalability and regular maintenance. Risk Management SCBAM's risk controls are multi-layered, evident in its integrated system controls, experienced risk managers and rigorous control processes, including frequent stress tests, counterparty reviews and regular reporting of operational, market, liquidity and credit risks. Investment risk management is strongly embedded in the asset manager's investment processes and risk analytics. SCBAM's parent, The Siam Commercial Bank Public Company Limited (AA+(tha)/Stable), governs risk policy, participates in SCBAM's risk management committee and provides its subsidiary with a robust set of risk-related resources. Investment Performance The firm's three-year risk-adjusted fund performance has mostly been sound relative to peers. SCBAM has mostly outperformed the industry average in fixed-income funds - the largest contributor to its assets under management (AUM) - on a risk-adjusted basis for each fund classification. The asset manager has also outperformed peers in equity funds focusing on small and mid-cap stocks, but has lagged peers in larger-stock funds that tend to be constrained by legacy investment guidelines. Company and Client Servicing Established in 1992, SCBAM has a sound investment-management franchise and significant footprints across a range of fund types, with THB1.3 trillion of AUM at end-April 2017. It retains a strong presence in fixed-income funds, which accounted for 76% of total AUM. The firm covers a broad range of mutual funds and has rapidly expanded its offerings in multi-strategy asset-allocation funds. Already the largest in the market, SCBAM's private funds have also seen notable increases in AUM in recent years, accounting for about 45% of total market share in April 2017. This attests to SCBAM's strong franchise among institutional and high-net worth clients. The firm's communication to unitholders has been systematic, often exceeding regulatory and industry standards. This is evident in its detailed reports to unitholders. RATING SENSITIVITIES The rating is sensitive to adverse changes to any of the following five key pillars: investment process; investment resources; risk management; investment performance; and the company's performance, including client servicing. Any negative change in the score assigned to one or more pillars could lower the rating. Contact: Primary Analyst Jackerin Jeeradit Associate Director +66 2108 0163 Fitch Ratings (Thailand) Limited Level 17, Park Ventures 57 Wireless Road, Patumwan Bangkok 10330 Secondary Analyst Lertchai Kochareonrattanakul Senior Director +66 2108 0158 Committee Chairperson Alastair Sewell, CFA Senior Director

+44 203 530 1147 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available on www.fitchratings.com. Disclosure: TISCO Asset Management Company Limited and Kasikorn Asset Management Limited each have a 10% equity stake in Fitch Ratings (Thailand) Limited. No shareholder, other than Fitch Ratings, is involved in the day-to-day rating operations of, or credit reviews undertaken by, Fitch Ratings (Thailand) Limited. Note to Editors: Fitch assigns national scale IMQRs to asset management companies operating in countries where, for some rating factors, a comparison with international standards may not be applicable. In such instances, those factors are evaluated relative to local market standards of institutional investors. NIMQRs, which display a special identifier for the country concerned, for example, 'Excellent(tha)' for Thailand, are comparable only to national IMQRs assigned in the same country. The ratings are issued on a five-point descriptive scale of 'Excellent(tha)' to 'Weak(tha)'. The sources of information used to assess this rating were SCBAM and information in the public domain. Applicable Criteria Investment Management Quality Ratings (Assessing Active, Passive & Alternative Investment Managers, Strategies & Funds) (pub. 06 Mar 2017) here National Scale Ratings Criteria (pub. 07 Mar 2017) here Additional Disclosures Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. 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