The Pakistan Credit Rating Agency Limited
17-Apr-19
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 Alfalah GHP Income Fund
| Rating Type | Stability Rating | |
|
Current (17-Apr-19 ) |
Previous (03-Dec-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The investment objective of Alfalah GHP Income Fund (AGIF) is to minimize risk, construct a liquid portfolio of fixed income instruments and provide competitive returns to the Unit Holders. The management team shall ensure the active implementation of prudent investment practices, the highest professional standards and compliance with applicable laws.
The rating reflects the fund's good credit quality and sound liquidity profile emanating from its ~62% exposure in cash with banks. The majority of exposure was with banks rated 'AA-' and above. The remaining ~17% assets of the fund was invested with TFCs/Sukuks having credit ratings of 'AA-' and above. The unit holding pattern of the fund is concentrated with top 10 investors representing ~87% of the fund's assets, (of which ~51% are owned investments) which exposes the fund to a low level of redemption pressure.
Going forward, the fund intends to maintain its exposure towards cash with banks - rated 'AA-' and above. The remaining net assets of the fund would be placed with TFCs/Sukuks. The fund is also planning to take some exposure in government securities. 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
Alfalah GHP Investment Management Limited was incorporated amid October 2004, as a public limited company. The major shareholders of the company are Bank Alfalah Limited with ~ 40% stake followed by MAB Investment Inc with ~ 42% stake. The company commenced its operations in March 2005 and is registered as an Asset Management Company and Investment Advisor under the Non-Banking Finance Companies Regulations. The company operates through its head office in Karachi and have branches in the major cities. The company is currently managing a diverse product slate of twenty funds.
Company’s eight-member BoD includes the CEO along with two representatives of BAFL, one representative of GHP Beteligungen Limited, one representative of MAB Investments and two directors are independent. The board is chaired by Mr. Adeel Khalid Bajwa. He is the CEO of Dhabi Group based in Abu Dhabi, United Arab Emirates.