The Pakistan Credit Rating Agency Limited
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Wajeeha Asghar

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PACRA Maintains Stability Rating of Atlas Islamic Income Fund

Rating Type Stability Rating
(14-Oct-22 )
(15-Apr-22 )
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

Atlas Islamic Income Fund (or the "Fund") is a medium risk profile. The assigned rating reflects the Fund's moderate credit and interest rate risk profile emanating from its investment strategy. The Fund had allocated ~9.8% invested in Placement with banks, ~14.2% in CPs, ~17.4% in Ijara Sukuks, ~35% in Corporate Sukuks. While ~19.7% were invested in banks rated AA and above. The duration of the Fund stood at 114 days in Jun’22 (104 days at end Dec'21) exposing the Fund to interest rate risk. The WAM of the Fund was 722 days in Jun’22 (Dec’21: 622 days) which shows increase from previous period which is mainly due to increased investment in long term Govt papers. However, risk remained manageable. The top 10 investors concentration of the Fund, at Jun’22 were ~45% of which 15% was related party holding, giving rise to a moderate level of redemption pressure.
Going forward, The asset quality of the assigned rating criteria would remain imperative to the rating and the material changes in the Fund's asset allocation strategy, which could negatively impact the Fund's credit quality and exposure to interest rate risk, would remain critical for the rating.

About the Entity
Atlas Asset Management Limited, incorporated in August 2002 and a part of Atlas Group, is a wholly owned (100%) subsidiary of Shirazi Investments (Pvt.) Limited - the holding company of the Group. Atlas Group, established in 1962, is one of the well-known business groups of the Country with a presence in manufacturing, financial, and trading sectors.
AAML's seven-member board of directors comprises four representatives of Atlas Group, two independent directors and the CEO. The CEO of the Company, Mr. Muhammad Abdul Samad, has completed the Advanced Management Program from INSEAD and holds postgraduate qualifications from the University of Karachi and the Southeastern University, he also holds certification from IFMP. He has been associated with the Company for over seventeen years and held C-Suite positions for over a decade. He has a significant Board experience, where he has served as a director on the board of nineteen listed companies, including Atlas Battery Limited, Lucky Cement, Berger Paints, Mirpurkhas Sugar, amongst others along with vast experience of the mutual fund industry. The Company is currently managing five conventional and five shariah compliant funds, along with two in the VPS category. The assets under management stood at ~PKR 45bln at end Jun'22

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.