The Pakistan Credit Rating Agency Limited
30-Jun-18
Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA
PACRA Maintains Stability Rating of Alhamra Islamic Income Fund (Formerly: MCB Islamic Income Fund)
| Rating Type | Stability Rating | |
|
Current (30-Jun-18 ) |
Previous (12-Jul-17 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The investment objective of the fund is to generate superior risk-adjusted returns by investing in short, medium and long-term Shariah-compliant fixed income instruments.
The rating incorporates the fund's moderate credit quality and liquidity profile emanating from the fund's policy to invest only in good quality Shariah-compliant instruments. At end-Dec17, 29.2% of the fund's net assets were invested with sukuks, whilst 29% were invested with banks rated 'AAA'. The remaining assets of the fund were invested in good quality corporate sukuks having credit rating of 'A' and 'A+'. Fund's whole exposure with 'A+' and above rating shows the good credit quality of the portfolio. The fund has well diversified unit holding pattern, with top10 investors representing 62% of the fund size.
Going forward, the fund intends to maintain its exposure towards bank placements (above 44%) with rest of the fund's assets invested in GoP Ijara and other debt securities. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.
About
the Entity
MCB Arif Habib Savings & Investments Limited (MCBAH) incorporated in August 2000 and listed on the Karachi Stock Exchange, is a major player in the mutual fund industry of Pakistan. During Jun11, MCB Asset Management Company was merged into Arif Habib Investments. The objective was to achieve synergies in the asset management business and access a wider distribution network.
Company’s eight members BoD, two representatives from MCB, two representatives from Arif Habib Group, CEO and three are independent. Mian Muhammad Mansha, Chairman MCB, serves as the Chairman on the board. Mr. Saqib Saleem is the CEO, having working experience of over thirteen years. With overall assets under management of ~ PKR 53 billion, the company is currently managing sixteen open-end funds and two voluntary pension funds.