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Fitch Affirms Wafa Gestion at 'Highest Standards (mar)'
July 2, 2014 / 4:21 PM / 3 years ago

Fitch Affirms Wafa Gestion at 'Highest Standards (mar)'

(The following statement was released by the rating agency) PARIS, July 02 (Fitch) Fitch Ratings has affirmed Wafa Gestion's National Asset Manager Rating at 'Highest Standards (mar)'. The Outlook is Stable. KEY RATING DRIVERS The rating reflects Wafa Gestion's long-established franchise, its sound position in the Moroccan asset management industry, and support from shareholders, Attijariwafa Bank (AWB, BB+/Stable) and Amundi. It also reflects a well-staffed organisation and a robust operational framework, which allow the company to develop specific and innovative products. Wafa Gestion's main challenge is strengthen risk management and control beyond what the company has amply covered in regulatory aspects. This includes enhancing credit and liquidity risk management, as well as the formalisation of counterparty monitoring and analysis of best execution. Wafa Gestion 'Highest Standards(mar)' rating is based on the following category scores: Company: Highest Controls: High Investments: Highest Operations: Highest Technology: Highest Asset manager operations in the 'Highest Standards(mar)' category demonstrate an investment platform and operational framework that Fitch considers superior relative to the standard applied by domestic institutional investors. Company: Wafa Gestion is the largest Moroccan asset manager in terms of assets under management (AUM). It uses the banking network support of AWB, and to a lesser extent, Credit du Maroc (with whom Wafa Gestion has a partnership contract) for distribution by tapping into their well-diversified and granular client base. As with other Moroccan bank-affiliated asset managers, the close relationship between the asset manager and the capital market division of the bank is subject to potential conflicts of interests. The company's staff is overall highly experienced, with a clear separation of duties (dedicated risk managers, analysts, traders). Its business development team was recently reorganised with the appointment of two separate Heads for retail and institutional & corporates clients. Controls: The control framework, largely driven by the regulator (CDVM), is sound and facilitated by adequate automation in MANAR, the central position-keeping system (a system for monitoring investment positions). An anti-money laundering policy is in place since February 2014. The remaining areas that could benefit from improvements are controls on transactions (formalisation of counterparty risk monitoring, liquidity risk, best execution analysis), particularly in view of the structural lack of liquidity in the Moroccan market. Investments: The well-staffed investment team comprises a dedicated Analysis & Research desk and an Engineering & Structuring desk, which works on structured products and innovative projects that are in progress. Fixed income and equity investment processes are disciplined and well structured, drawing on mostly internal fundamental research completed by onsite management visits. The processes are formalised in the form of successive committees to devise model portfolios. Following departures in the team, Wafa Gestion is shortly recruiting one fixed income portfolio manager and two analysts. Operations: Operational and valuation procedures are efficient and adequately controlled, with MANAR being the core, front-to-back backbone, having full coverage and almost complete automation (broker/custodian matching are still partially done manually). Client reports production is automated and follows good practices in terms of frequency and distribution time. The database underwent a deep revamp in 2013, aimed at synthetising information and optimising various requests. The company has also finalised its dedicated website project, which is scheduled to go online in July 2014. Technology: IT development is outsourced to AWB with a service level agreement in place, while one dedicated member of staff, full-time at Wafa Gestion, acts as a gateway between users and AWB, as well as with the MANAR provider (Perennity) for adequate upgrades.. The business continuity plan, overseen and managed by AWB, is on hold, pending developments being finalised at the bank. Incorporated in 1995, Wafa Gestion is the asset management arm of AWB, its main shareholder with 66% of the capital, while the remainder is held by the French asset manager, Amundi. Wafa Gestion employed 43 staff at end-June 2014 and was managing assets totaling MAD81.75bn (about EUR7.3bn) on behalf of Moroccan institutional investors, large corporates and retail clients. Wafa Gestion invests almost solely in the local market and covers all asset classes although approximately 90% of AUM is concentrated in money market and bond products, in line with the local market. RATING SENSITIVITIES The rating may be sensitive to material adverse changes to any of the aforementioned rating drivers, notably through weakened financial conditions, heightened staff turnover or deterioration of processes and policies. A material adverse deviation from Fitch guidelines for any key rating driver could cause the rating to be downgraded by Fitch. Contact: Primary Analyst Francois Vattement, CFA Associate Director +33 1 44 29 92 75 Fitch France S.A.S. 60 rue de Monceau Paris 75008 Secondary Analyst Manuel Arrive, CFA Senior Director +33 1 44 29 91 77 Committee Chairperson Ian Rasmussen Senior Director +1 212 908 0232 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: Elaine.Bailey@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, 'Asset Manager Rating Criteria', dated 6 May 2014, are available at www.fitchratings.com. Applicable Criteria and Related Research: Asset Manager Rating Criteria here Additional Disclosure Solicitation Status 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 WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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