The Pakistan Credit Rating Agency Limited
02-Mar-23
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 AL Habib Income Fund
| Rating Type | Stability Rating | |
|
Current (02-Mar-23 ) |
Previous (02-Sep-22 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
AL Habib Income Fund (or the "Fund") reflects the medium risk profile. The assigned rating reflects the Fund's moderate credit risk profile emanating from Fund's Investment policy to invest in avenues with sound liquidity. The Fund had allocated ~86.5% in PIBs, ~4.5% in T-bills, ~3.5% in Cash majority in AAA rated bank, ~2.1% are placed in TFCs rated AA, ~1.9% in Sukuks rated AA- and above whereas ~1.5% other avenues at the end Dec’22. The duration of the Fund stood at 16 days at the end Dec’22, limiting exposure to interest rate risk. While the WAM of the Fund increased to 988 days at the end Dec'22 due to major investment in PIBs. However, the major investment in Govt Securities is providing comfort to the assigned rating. The unit holding pattern of the Fund was highly concentrated where ~80.3% were represented by the top 10 investors. The Fund would remain exposed to redemption pressure. The Fund remained compliant with the given criteria of assigned rating by investing minimum 25% in Govt Sec/AAA rated avenues and maximum 25% in double AA- rated avenues.
Going forward, any material changes in the investment policy would remain imperative. While compliance with the devised rating criteria for the assigned rating would remain critical.
About
the Entity
AL Habib Asset Management Limited ("AHAML") incorporated in September 2005 as an unlisted public company, is one of the growing Asset Management and Investment Advisory Company in Pakistan. The company is licensed by the Securities and Exchange Commission of Pakistan(SECP) to carry out these services under the Non-Banking Finance Companies Regulations. The Company is a wholly-owned subsidiary of Bank AL Habib Limited. The Board of Directors comprises six members. The CEO, Mr. Kashif Rafi, has vast experience expanding over 21 years in the field of Investments and Fund Management. The Company’s diverse product slate includes 5 conventional funds, 4 shariah-compliant funds, 1 shariah compliant pension fund and 1 conventional pension fund. As of Dec'22, the total net assets of AHAML stood at PKR 74bln.