The Pakistan Credit Rating Agency Limited
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Ayesha Qasim

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PACRA Maintains Stability Rating of Faysal Financial Sector Opportunity Fund

Rating Type Stability Rating
(26-Dec-18 )
(20-Jun-18 )
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

Faysal Financial Sector Opportunity Fund (FFSOF) seeks to provide a competitive rate of returns to its investors by investing in money market and debt instruments with major exposure in financial sector instruments.

The rating reflects sound credit quality and liquidity profile of the fund owing to sizeable investments in high rated avenues. At end of Jun-18, the fund is primarily invested ~66% in cash with high credit quality banks [majority with 'AAA' (~64%)], while remaining assets were invested in TFCs rated AA- and above. The unit holding pattern of the fund is concentrated with ~ 62%  investors. Meanwhile, the group's own investment represents ~ 13% in the total portfolio which exposes the fund to a low level of redemption pressure.

Going forward, the fund intends to allocate its assets towards  TFCs and cash balances (rated 'AA-' and above). 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
Faysal Asset Management Limited (FAML) was incorporated in 2003 as an unlisted public limited company under the company's ordinance, 1984. The major shareholders of the company are Islamic Investment Company of the Gulf, Bahamas Ltd having ~50% stake, followed by Faysal Bank Limited having ~30% stake. Mr. Razi Ur Rahman Khan - CEO - holds the remaining 20% stake in FAML. The company is managing a diversified portfolio of nine open-end funds with the combined AUMs of ~PKR 7.6 billion at end-Oct'18

The CEO, Mr. Razi-ur-Rahman Khan has extensive experience in banking, mutual funds management, the equity brokerage and private equity investment.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.