The Pakistan Credit Rating Agency Limited
22-Apr-24
Analyst
Hassaan Ahmad
Hassaan.Ahmad@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Assigns Stability Rating to ABL Financial Sector Fund
| Rating Type | Stability Rating | |
|
Current (22-Apr-24 ) |
||
| Action | Initial | |
| Long Term | A+(f) | |
| Short Term | - | |
| Outlook | Stable | |
| Rating Watch | - | |
ABL Financial Sector Fund (or the 'Fund') is a moderate-risk profile Fund. The objective is to earn competitive risk-adjusted rate of return by investing in a blend of short, medium, and long-term fixed income and debt instruments. The Fund shall invest primarily in short-duration instruments and may even hold some or all of its assets in cash for the purpose of maintaining liquidity. The AUMs of the Fund stood at PKR 2,911mln at the end Dec’23 (Sep’23: PKR 972mln). The Fund had invested ~20.73% in PIBS, ~12.97% in bank rated in AAA category, and ~74.30% in Microfinance Banks rated in A category at end – Dec’23. The duration and the WAM of the Fund stood at 285 days, with high exposure to interest rate and credit risk at the end Dec’23. The unit holding pattern of the Fund stood at ~90.57% representing top ten investor concentration at the end Dec’23; exposing the Fund to a very high level of redemption pressure. Redemption pressure is addressed through the maintenance of sufficient liquidity through allocation in banks. During the month of Dec’23, ABL Financial Sector Fund , posted an annualized return of 23.571% against the Benchmark return of 21.53% thereby outperforming the Benchmark by 204 bps.
Going forward, any material changes in the investment policy and/or compliance with the rating criteria for the assigned rating would have an impact on the ratings.
About
the Entity
Incorporated in 2007, ABL AMC is a wholly owned subsidiary of Allied Bank Limited (ABL). ABL operates with 1,400 plus branches including 117 Islamic banking branches, 8 Digital/ Self Service branches & 2 overseas branches. ABL AMC possesses licenses for asset management, pension management and investment advisory services. As the leading private sector asset
management and investment advisory Company in Pakistan, offerings include a comprehensive range of both Conventional and Shariah Compliant investment solutions across all major asset classes. Assets under management of the Company stood at ~PKR 169.798bln at the end of Dec'23.