ICRA Nepal gives AMC Quality 3 rating to Global IME Capital for fund management

Global IME Capital Limited (GICL) has got ICRA Rating AMC Quality 3 (AMC3) for the Fund Management Quality Rating indicating adequate assurance on management quality. Global IME Capital is planning to manage the fund. The adequate assurance on management quality factors in the ownership and technical support of Global IME Bank Limited. ICRA Nepal assigns The Fund Management Quality Rating (FMQR) on a scale of AMC1 through AMC5, with AMC1 indicating highest assurance on management quality and AMC5 indicating poor assurance on management quality. FMQR of GICL also factors adequacy of system and processes being developed for the proposed level of operation (Global IME Samunnat Fund -1 amounting NPR 800 million), moderately experienced senior management and fund supervisor involved in the management and supervision of the proposed scheme. The proposed equity oriented growth scheme of GICL (Global IME Samunnat Fund -1) is projected to register moderate growth in NAV while focusing more on plough back of generated profits towards investment growth, which reflects positively on the Investment strategy of GICL. However, sustainability of the growth and return to investors over longer time frame remains to be seen considering the volatility of evolving Nepalese stock market and its effect on the underlying equity investments of the scheme. FMQR is nonetheless constrained by the uncertain operating environment amidst volatility in the market with political instability, developing systems and processes with respect to fund management, evolving nature of mutual fund industry and low awareness about the mutual fund among general investor. The rating also takes note of the absence of track record of GICL as fund manager although it has adequate track record in Nepalese capital market as merchant banker.