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
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PACRA Maintain Stability Rating of AKD Cash 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 fund's objective is to provide optimum returns with minimum risk by investing in high quality short term liquid securities / instruments.
The rating reflects the fund's sound credit risk profile emanating from the fund's investment policy to invest in high credit quality investment avenues with sound liquidity. The fund's portfolio, at end-Dec17, comprises T-Bills (94%) and cash balances (6%). On monthly average basis, 91% of the fund's assets were invested in Government securities in Dec-17. Fund's portfolio duration of 30 days results in low exposure towards interest rate volatility. The fund's unit holding pattern remains highly concentrated with the top10 investors comprising 75% of the fund's net assets, exposing fund to the redemption pressure. The comfort can be drawn from the liquid nature of investments.
Going forward, the rating remains dependent on maintaining at least 50% allocation towards government securities or AAA exposure with portfolio duration not exceeding 60 days. Meanwhile, the remaining assets of the fund must be placed with scheduled banks having credit ratings of 'AA' and above. PACRA would monitor compliance against agreed parameters.
About
the Entity
AKD Investment Management Limited, after acquisition of rights to manage Golden Arrow Selected Stocks Fund (GASSF), commenced operations in September 2004. The company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. Company is sponsored by Aqeel Karim Dhedhi Securities (Pvt) Limited (99.97% ownership). Aqeel Karim Dhedhi Securities (Pvt) Limited is majority owned by Mr. Aqeel Karim Dhedhi, Chairman of the AKD Group, a renowned figure in Pakistan's capital market. The remaining stake is held by four directors and an ex-CEO of the company.
The Board of Directors of the company comprise seven members, including its CEO. Mr. Imran Motiwala has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The company is currently managing six open end funds and one closed-end fund with assets under management of ~PKR 6.2 billion at end March-18.