The Pakistan Credit Rating Agency Limited
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Ayesha Qasim

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PACRA Maintains Stability Rating of Alfalah GHP Money Market Fund

Rating Type Stability Rating
(17-Apr-19 )
(03-Dec-18 )
Action Maintain Maintain
Long Term AA+(f) AA+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The objective of the fund is to generate competitive returns consistent with low risk from a portfolio constituted of short-term instruments including cash deposits, money market placements and government securities. The Fund will maintain a high degree of liquidity, with time to maturity of a single asset not exceeding six months and with the weighted average time to maturity of Net Assets not exceeding 90 days.

The rating reflects the fund's strong credit quality and sound liquidity profile. At the end of Dec-18, the fund has ~85% exposure with banks as cash rated 'AA+' and above. On a monthly average basis, fund's duration in the last 6 months remained below 45 days. Going forward, management intends to have a duration not exceeding 45 days. The unit holding pattern of the fund represents a moderate level of redemption risk as top 10 investors concentration was ~56%.

Going forward, the rating remains dependent on maintaining the portfolio allocations towards government securities and banks with strong credit quality. 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.

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.