The Pakistan Credit Rating Agency Limited
18-Apr-22
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of Faysal Halal Amdani Fund
| Rating Type | Stability Rating | |
|
Current (18-Apr-22 ) |
Previous (20-Oct-21 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Faysal Halal Amdani Fund (or the "Fund") reflects the Fund's low risk profile, had allocated ~82% as cash placements in banks having rating ‘AA’ and above. However, 20% of investment in a single bank is giving rise to concentration risk, The rest of the investment ~15% is invested in ICPs and short term sukuks having rating ‘AA’ and above. The overall credit quality of the Fund remained compliant with the rating criteria for the assigned rating. While the Fund, also remained compliant with its Investment Policy during CY21. The duration and WAM of the Fund remained 17 days at Dec'21. The top 10 investors' concentration of the Fund was~92%, giving rise to high redemption pressure, however, high placement in cash is giving comfort to the risk.
Going forward, Faysal Halal Amdani Fund intends to hold majority of exposure in liquid avenues. Further, the Fund management will also explore multiple investment avenues including Islamic Commercial Papers, Short Term Sukuks and Placements with Banks/ DFIs. Meanwhile, the assets of the Fund must be placed with the minimum credit ratings of 'AA' and above. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect 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.