Muhammad Zain Ayaz
PACRA Maintains Stability Rating of Pak Oman Government Securities Fund
|Rating Type||Stability Rating|
The rating reflects Pak Oman Income Fund's (Formerly Pak Oman Government Securities Fund) credit quality and liquidity profile emanating from the fund's policy to generate competitive return through investing primarily in government securities. At end Dec'21, the Fund had allocated ~71% in government securities (T-bills of 3 and 6 months), ~27% in banks having rating ‘A’ and above and ~2% in others. The unit holding pattern of the fund is highly concentrated with top ten investors representing ~100% of the fund's assets, of which ~14% are related parties. The current investment strategy is in line with the investments policy, while the policy allows the Fund to invest its assets up to 100% in government backed securities. The Fund's duration is 44 days, at Dec'21 (Jun'21: 41 days), enabling the Fund to keep interest rate risk and market risk at manageable level.
Going forward, the rating remains dependent on maintaining at least 70% allocation towards government securities with portfolio duration not exceeding 2 years. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
Pak Oman Asset Management Company Limited was incorporated on July 28, 2006 as a public unlisted company. It is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a majority owned subsidiary of Pak Oman Investment Company Limited (98%). The remaining shareholders include Oman International Development Company (0.84%) and Bank Muscat (0.43%).
The company’s Board of Directors comprises six members including the managing director of Pak Oman Investment Company, Mr. Bahauddin Khan. The board’s chairman H.H Juland Jaifer Salim Al-Said has over 15 years of experience at the Oman Investment Authority (OIA) (Previously known as State General Reserve Fund). The company’s diverse product slate includes nine open-end funds as at Dec'21 belonging to all major categories.