Analyst
Mohsin Naseer
mohsin.naseer@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of Faysal Savings Growth Fund
Rating Type | Stability Rating | |
Current (12-Jul-17 ) |
Previous (27-Dec-16 ) |
|
Action | Maintain | Maintain |
Long Term | AA-(f) | AA-(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The investment objective of the fund is to earn competitive returns by investing mainly in a mix of short term to long term government securities and other debt instruments, having investment grade credit rating.
The rating reflects fund's strong credit quality and sound liquidity profile. At end-May- 17, the portfolio is primarily invested in short-term government securities (Tbills: 3.8%). The remaining assets (33.8%) are invested in daily cash balances and bank placements with majority of the portion in 'AA-' rated banks and good quality TFCs (25.6%) with 'AAA' and 'AA-' credit rating. A sizeable portion is deployed in margin trading system (34.8%) which, due to its self-liquidating nature, possesses less risk over a short tenure. The unit holding pattern of the fund is moderately concentrated with the top10 investors representing 54% of the fund's assets.
Going forward, As per the Investment Philosophy, the fund would maintain at least 25% allocation towards government securities, upto 25% exposure in margin trading system, exposure in TFCs / Sukuks would be upto 10% restricted to 'AA-' and above instruments; the remaining balance would constitute placements with high rated ('AA-' and above) banks, wherein, deposits with below 'A+' rated banks would not exceed 1%. Adherence to the stated Investment Philosophy of the fund remains crucial for the rating.
About
the Entity
Faysal Asset Management Limited (FAML), licensed to conduct asset management and investment advisory services, was incorporated in 2003 as an unlisted public limited company under company's ordinance, 1984. The major shareholder of FAML is Islamic Investment Company of the Gulf (Bahamas) Ltd (50% stake), followed by Faysal Bank Limited (30% stake). Mr. Razi Ur Rahman Khan, a director of FAML, holds the remaining 20% stake in FAML. Presently, the company is managing a diversified portfolio of nine open-end funds, with combined AUMs of PKR 7.7 billion at end-May'17
The CEO, Mr. Razi-ur-Rahman Khan, has extensive experience in domestic and international capital markets. He is supported by the experienced management staff