The Pakistan Credit Rating Agency Limited
09-Mar-21
Analyst
Afnan Iqbal
afnan.iqbal_old@pacra.com_old
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Upgrades Stability Rating of Lakson Money Market Fund
| Rating Type | Stability Rating | |
|
Current (09-Mar-21 ) |
Previous (16-Oct-20 ) |
|
| Action | Upgrade | Maintain |
| Long Term | AA+(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating upgrade incorporate the placement of fund's assets in highly liquid and secure investment avenues having limited exposure to market risk. The rating reflect the fund's strong credit quality, robust liquidity and low exposure to interest rate volatility. The fund aims to invest in a liquid portfolio of low risk short-term investments with low volatility. The fund's investment policy dictates placing fund's assets with instruments having a maturity of less than six months and the weighted average maturity of the portfolio shall not exceed by three months. This enhances the interest rate risk profile and liquidity profile of the fund. The fund shall invest only in instruments rated 'AA' and above which strengthen the fund's credit risk profile. At end Dec'20, ~97% of fund's assets were deposited with 'AAA' rated banks. Average duration of the fund remained within 45 days. Fund's unit holding pattern is highly concentrated with top 10 investors representing ~71% of the net assets; however, due to the highly liquid nature of the fund's assets the fund has an adequate ability to meet redemption pressure.
Going forward, in accordance with the investment policy and market expectations, the fund may consider to maintain its exposure in 'AA+' and higher rated investment avenues. 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
Lakson Investments Limited, the investment management company of the Lakson Group, was incorporated on January 02, 2009 as an un-listed public company. It is licensed to undertake Asset Management and Investment Advisory services. Lakson Investments is the only AMC, which offers exposure to international markets through Lakson Asset Allocation Developed Markets Fund. The Company is also managing a private equity and a venture capital fund along with conventional mutual funds and SMA products.
The company’s control vests in eight-member board, comprising four non-executives, one executive and three independent directors. The Chairman of the Lakson Group, Mr. Iqbal Ali Lakhani, is the chairman of Lakson Investment’s board. The Company is managing six open-end funds under five different categories with an aggregate AUM base of ~PKR 21,926mln at end-Dec'20.