The Pakistan Credit Rating Agency Limited
12-Jul-17
Analyst
Mohsin Naseer
mohsin.naseer@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of Alfalah GHP Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (12-Jul-17 ) |
Previous (09-Dec-16 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The investment objective of the fund is to provide investors with reasonable rate of return along with long term capital appreciation by investing in a diversified portfolio of Shariah compliant investment instruments.
The rating reflects fund's strong credit quality and strong liquidity profile emanating from its 78% exposure as cash. The remaining 21% assets of the fund were invested in good quality corporate sukuks having rating of 'AA-' and above at end-May-17. Meanwhile, the rating incorporates the fund's low exposure to interest rate volatility. The unit holding pattern of the fund is highly concentrated with top10 investors representing 99% of the fund, which represents redemption risk.
Going forward, the management intends to maintain the current investment strategy. 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
Commencing operations in Mar 05, Alfalah GHP Investment Management Limited (AGIML) is 82% owned by Abu Dhabi Group, including 40% through Bank Alfalah Limited (BAFL) and 42% through MAB Investments Inc. Meanwhile, GHP Arbitrium Holdings Limited (GHP) owns 14% stake. BAFL is the sixth largest commercial bank of the country with a branch network of over 500 branches. AGIML is currently managing sixteen open-end funds with cumulative assets under management of PKR 36bln at end-Mar17.
The company's six member BoD comprises CEO, two representatives of BAFL, one representative of GHP Arbitrium Holdings Limited, one representative of MAB Investments and one independent director. The board is chaired by Mr. Ali Sultan, Group Head - Treasury, Investments & Financial Institutions, Bank Alfalah Limited. The CEO of AGIML, Ms. Maheen Rahman, has over 17 years of rich local and international experience in the financial services. She is assisted by an able team.