The Pakistan Credit Rating Agency Limited
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Ayesha Qasim

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PACRA Maintains Stability Rating of Faysal Income and Growth Fund

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

Faysal Income & Growth Fund (FIGF) seeks to provide its investors with optimal yields through a diversified portfolio consisting of both long-term fixed instruments as well as short-term money market securities.

The rating reflects the fund's strong credit quality and robust liquidity profile. At end-Jun 18, fund's placements with banks were ~63%. The majority of the exposure was with banks rated 'AA+' i.e. ~59%, while the exposure with 'AA-' rated banks was ~19.2%, with 'A+' rated  ~9.4% and with 'A' rated ~5.5%. The remaining assets were invested in TFCs with rating 'A' and above. The unit holding pattern of the fund is highly concentrated with top 10 investors representing ~75% of the fund's assets, (of which ~30% are owned investments) which exposes the fund to a low level of redemption pressure.

Going forward, the fund intends to maintain its exposure towards debt instruments. The remaining majority assets of the fund will be placed with banks rated ‘AA-‘. 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.