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The Pakistan Credit Rating Agency Limited
Press Release

Date
18-Apr-22

Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Stability Rating of Faysal Financial Sector Opportunity Fund

Rating Type Stability Rating
Current
(18-Apr-22 )
Previous
(18-Oct-21 )
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

Faysal Financial Sector Opportunity Fund (or the "Fund") reflects the Fund's moderate risk profile. The Fund seeks to provide a competitive rate of returns to its investors by investing in money market and debt instruments with major exposure in financial sector instruments. The Fund had allocated ~86% of total assets in AAA and AA- rated banks as bank deposits. However, investment of 20% and above in a single bank is giving rise to concentration risk. The rest of the funds ~ 13% are invested in CPs, TFCs/Sukuks having rating AA and above. The overall credit quality of the Fund remained compliant with the rating criteria for the assigned rating. The Fund also remained compliant with its investment policy, during VY21. The duration of the Fund remained at 4 days, at Ded'21. While the WAM remained at 40 days minimizing the exposure to credit risk. The Fund had a moderate level of top ten investors concentration at ~57%.
Going forward, the Fund intends to reduce its exposure with banks and invest the amount in government securities. Material changes in the Fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remain critical for the rating.

About the Entity
Faysal Funds (Faysal Asset Management Limited) is a subsidiary of Faysal Bank Limited (FBL). FBL is holding 99.99% shares of Faysal Funds. Faysal Funds was incorporated in Pakistan under the Companies Ordinance, 1984 on August 6, 2003 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services.
The Board of Directors of the Company comprises six members, including the Chairman Mr. Salman Ahmed Usmani. He has a rich experience of over three decades in the local as well as multinational banking sector. Mr. Khaldoon bin Latif (CEO) has been associated with the capital markets for over fifteen years. Mr. Latif is a LUMS Alumni and has done a number of capital market courses with CFA association, Daiwa, J.P. Morgan and Bahrain Institute of Banking and Finance (BIBF). The Company is managing a diversified portfolio of funds, with AUM’s of ~PKR 76bln at end Dec'21.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.