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The Pakistan Credit Rating Agency Limited
Press Release

Date
04-Mar-22

Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Stability Rating of AL Habib Income Fund (Formerly: First Habib Income Fund)

Rating Type Stability Rating
Current
(04-Mar-22 )
Previous
(04-Sep-21 )
Action Maintain Maintain
Long Term AA(f) AA(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating of AL Habib Income Fund (or the "Fund") reflects the fund's moderate risk profile. The fund has allocated ~89% in bank deposits out of which ~99% were in AA+ rated bank, while ~4% to TFCs having rating AA, and ~4% to Sukuks having rating A and above. However, concentration risk has arisen depicting investment in a single bank. As per the investment policy, the Fund can invest up to 100% of its assets as bank accounts having rating of ‘A’ and above. The Fund has high concentrated unit holding pattern, with top 10 investors representing ~77% of the Fund size at end Dec’21. The WAM of the Fund decreased to ~196 days at Dec'21 (Jun'21: ~276 days). While the duration of the Fund was Kept on lower side i.e. 7 days at Dec'21, limiting the exposure to interest rate risk.
Going forward, the management intends to diversify its Funds allocation by placing 50% in AAA rated avenues (Govt. Securities and bank deposits) and 25% in AA avenues. Asset credit quality and duration would remain imperative for rating.

About the Entity
AL Habib Asset Management Limited incorporated in September 2005 as an unlisted public company, is one of the growing Asset Management and Investment Advisory Company in Pakistan. The company is licensed by the Securities and Exchange Commission of Pakistan (SECP) to carry out these services under the Non-Banking Finance Companies Regulations. The Company is a wholly owned subsidiary of Bank AL Habib Limited.
The Board of Directors comprises six members. The CEO, Mr. Kashif Rafi, has vast experience expanding over 20 years in the field of Investments and Fund Management. The Company’s diverse product slate includes 5 conventional funds and 4 shariah compliant funds.

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.