The Pakistan Credit Rating Agency Limited
28-Dec-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 AKD Cash Fund
| Rating Type | Stability Rating | |
|
Current (28-Dec-18 ) |
Previous (30-Jun-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA+(f) | AA+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The Objective of AKD Cash Fund (AKDCF) is to provide optimum returns consistent with minimal risk from a portfolio constituted of high-quality short-term securities/instruments, which will provide liquidity. The Fund will exclusively invest in highly secure ('AA' and above) short-term debt instruments such that the weighted average maturity of its net assets will stay below 90 days.
The rating reflects the fund's strong credit risk profile emanating from its investment strategy to invest in high credit quality investment avenues with sound liquidity. The fund's portfolio, at end-Jun18, comprises T-Bills ~90% and cash balances ~10%. Fund's portfolio duration of 36 days results in low exposure towards interest rate volatility. The fund's unit holding pattern remains highly concentrated with the top 10 investors comprising ~88% of the fund's net assets, exposing the fund to a high level of redemption pressure. The comfort can be drawn from the liquid nature of investments.
short-term, 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 the scheduled banks having credit ratings of 'AA' and above.
About
the Entity
AKD Investment Management Limited commenced its operations in September 2004. The company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The 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 Board of Directors of the company comprise seven members, including the CEO Mr. Imran Motiwala, who 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 5.6 billion at end October-18.