The Pakistan Credit Rating Agency Limited
13-Oct-22
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of AWT Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (13-Oct-22 ) |
Previous (08-Apr-22 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
AWT Islamic Income Fund (or the "Fund") is medium risk profile Fund. The assigned rating reflects the Fund's moderate credit risk profile emanating from its asset allocation. The Fund had allocated ~85% in cash mainly AAA rated banks, ~12% in certificate of musharaka whereas, ~1.2% in Sukuks in the end Jun'22. The Credit quality of the Fund allocates as ~9.4% in Gov/AAA while ~84.75% in single A+ and ~1.16% in double AA- . The duration and the WAM of the Fund reduced to 7 days in the end Jun'22 (Dec'21: 24 days), limiting the exposure to interest rate and credit risk. The unit holding pattern of the Fund represented 64% of the Fund's asset which is concentrated with the top 10 investors.
Going forward, 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
AWT Investments Limited is a public unlisted company, incorporated in 2011. It is a Non-Banking Finance Company, licensed by the Securities and Exchange Commission of Pakistan to manage open and closed-end funds and Investment Advisory Services. The Company is a wholly-owned subsidiary of Army Welfare Trust. The Board of Directors of the Company comprises five members. The CEO of the Company Mr. Salman Haider has recently resigned. Mr. Sajjad Anwar has joined as CEO of the Company in Mar'22. Mr. Anwar is CFA charter holder and has over 21 years of experience that involves Equity Research, Portfolio Management, Investment Advisory, Risk Management, and Finance & Accounts. For the last 15 years, he has been working in the Fund Management Industry. Before becoming CEO at AWTIL, he was performing the role of Chief Investment Officer at NBP Funds.
The Company's six-member Board of directors includes five director and the CEO. With overall assets under management of PKR 2.2bln at the end Jun'22, the company is currently managing three conventional funds and two shariah complaint funds.