The Pakistan Credit Rating Agency Limited
30-Jun-18
Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of Pak Oman Government Securities Fund
| Rating Type | Stability Rating | |
|
Current (30-Jun-18 ) |
Previous (12-Jul-17 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating reflects the fund's strong credit quality and a sound liquidity profile emanating from the fund's policy to invest 70% of asset in a mix of short-term and long-term government securities. At end-Dec17, 71% of the fund's exposure was in short term Government securities (T-bills) and the remaining portfolio was invested in TFCs (i.e. 18%) with "A+" and above rated avenues. On average basis, fund’s duration was below 2 years in the last quarter. The unit holding pattern of the fund is concentrated with top10 investors representing 100% of the fund's assets, (of which ~90% are owned investments) which exposes the fund to a low level of redemption pressure.
Going forward, the rating remains dependent on maintaining at least 70% allocation towards government securities with portfolio duration not exceeding 2 years. PACRA would monitor compliance against agreed parameters on the monthly average basis.
About
the Entity
Pak Oman Asset Management Company Limited was incorporated on July 28, 2006 as a public unlisted company. It is licensed by the Securities and Exchange Commission of Pakistan (SECP) to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. During the year, the company remained a majority owned subsidiary of Pak Oman Investment Company Limited (97%). The remaining shareholders include Oman International Development Company (1.2%), Bank Muscat (0.6%) and National Logistic Cell (1.2%).
The company’s Board of Directors (BoD) currently comprise eight members including the CEO, Mr. Adeel Ahmad Khan. The board’s chairman H.E. Yahya Bin Said Bin Abdullah Al-Jabri belongs to the Omanian royal family. The company’s diverse product slate includes eleven open-end funds as at March-18 belonging to all major categories. Pak Oman has four open-end funds under its name, while seven open-end funds belonged to Askari Investment Management Limited which have now been acquired by Pak Oman.