The Pakistan Credit Rating Agency Limited
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Afnan Iqbal

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PACRA Maintains Stability Rating of Alfalah GHP Income Multiplier Fund

Rating Type Stability Rating
(17-Apr-20 )
(17-Oct-19 )
Action Maintain Maintain
Long Term A+(f) A+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating reflects the moderate strength of the fund's credit and interest rate risk profile. At end Dec-19, 52% of fund's assets were invested in T-Bills and, while remaining funds were invested in banks and TFCs. Duration of the fund remained high at and Dec-19 (186 days), exposing it to interest rate risk. The unit holding pattern of the fund is highly concentrated with top ten investors representing ~84% of the fund's assets, which exposes the fund to high level of redemption pressure.
Going forward, the fund intends to maintain its asset allocation in government securities and corporate papers. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
Alfalah GHP Investment Management Limited (AGIML), was incorporated on October 18, 2004 as an unlisted public limited company. The company was established as joint venture NBFC by Bank Alfalah Limited and GHP Arbitrium. Bank Alfalah is one of the largest banks in Pakistan with a network of over 600 branches. Major shareholders of the company are M/s Bank Alfalah Limited (40.22%), M/s MAB Investment Inc (41.72%) and M/s GHP Beteiligungen AG (14.36%).

The company's eight-member board comprise the CEO and chairman. There are five non-executive directors, two independent directors and one executive director. The CEO, Ms. Maheen Rahman has over eighteen years of experience in investment banking, research and asset management. The Chairperson of the Board of Directors is Ms. Dominique Liana Russo, she is the CEO of Dhabi Holdings PJSC. The Board has immense expertise in financial sector, research and analysis, banking and asset management. With overall assets under management of ~PKR 41,973 mln at end Dec-19, the Company is currently managing fifteen open-end funds and two voluntary pension schemes.

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.