The Pakistan Credit Rating Agency Limited
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Wajeeha Asghar

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PACRA Assigns Initial Rating to "Pak Qatar Daily Dividend Plan" under Pak Qatar Islamic Cash Fund

Rating Type Stability Rating
(02-Dec-22 )
Action Initial
Long Term AA(f)
Short Term -
Outlook Stable
Rating Watch -

Pak Qatar Islamic Cash Fund (or the "Fund") is an open-ended shariah compliant money market fund. The Fund falls under a very low risk profile. The objective of the Fund is to maximize the investor's return by investing in shariah-compliant authorized investable avenues. The under mentioned plans are initially offered under the umbrella of the Fund i) Pak-Qatar Asan Munafa Plan ii) Pak-Qatar Cash Plan and iii) Pak-Qatar Daily Dividend Plan. Subsequently, additional plans may also be launched.
Pak Qatar Daily Dividend Plan (PQDDP or the 'Plan') focus on generating competitive return who prefer daily dividend under a stable Money Market category. The objective to invest in low risk and liquid Shariah Complaint instruments. The term of the plan is perpetual. The initial Fund size of the plan is 554mln. As per the investment policy of the plan, the plan can't invest in below double AA rated avenues. While as far as asset allocation is concerned, the Plan can invest up to 100% in shariah-compliant Govt. securities and cash at Bank. The plan may change the dividend frequency at its own discretion for the benefit of the unit holder with prior intimation.
Currently, the plan had invested ~74.9% in single bank rated AA whereas ~24.4% in Sukuks in the end Oct'22. The duration of the plan stood at 45 days in the end Oct’22, limiting the exposure to interest rate risk The WAM of the plan stood at 42-days, limiting the exposure to credit risk. The unit holding pattern of top ten investor concentration is 99% which is all related party holding, hence reducing redemption pressure. Going forward, the plan is intended to invest in AA and above rated avenues. Out of which at least 25% would remain invested in AA+ rated avenues.
Going forward, the plan ensures to diversify their investment in AA and above rated avenues. Any material changes in the investment policy or the devised rating criteria for the assigned rating would have an impact on the rating.

About the Entity
Pak Qatar Asset Management Company Limited (PQAMC) was formed in 2021 offering Shariah Compliant Investment solutions and is part of Pak-Qatar Group, a pioneer in Takaful Industry in Pakistan. The Group comprise of Pak Qatar Family Takaful Limited(PQFTL), Pak-Qatar General Takaful Limited(PQGTL), Pak Qatar Investment (Pvt) Limited(PQIL), Sharq Trading & Merchandising Limited, MPQ Developers (Pvt) Limited. The group has been operating in Pakistan since 2007 has diverse experience of over fifteen years in providing takaful solutions in Pakistan with Asset Under Management of over ~PKR 32bln. The CEO, Mr. Farhan Shaukat, FCA, has been associated with the group for over a decade heading Treasury function of the group. The company has launched three funds under Money Market, Income and Equity category under plan arrangement. AUM of the company stood at ~PKR 3bln by Oct’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.