PACRA Maintains Stability Rating of Alhamra Islamic Income Fund
|Rating Type||Stability Rating|
Alhamra Islamic Income Fund (or the ‘Fund’) is a medium risk-profile fund. The assigned rating reflects the Fund's strong credit and interest rate risk profile emanating from its investment strategy. At the end-Jun'21, the Fund had placed ~44% of its assets in banks, majorly rated ‘AAA’. At end-Jun’21, the Fund had maintained ~14% of its net assets in Shariah Compliant Bank Deposits. The WAM of Fund was 2.6 years at end-Jun’21, which is in line with the investment policy. The Benchmark return of the Fund will be the 6-month average deposit rate of 3 'A' rated Islamic banks/Islamic windows of conventional banks. During FY21, the Fund’s return was 6.51% compared with the 3.54% benchmark. At end-Jun'21, the top ten investors' concentration stood at ~42% representing a moderate level of redemption pressure.
Going forward, the Fund will invest per its authorized investment policy, however, the allocations will be diversified appropriately. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
MCB-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a public listed company, regulated by the SECP. MCB-AH holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCB-AH was incorporated in 2000 as Arif Habib Investments Limited and subsequently merged with MCB Asset Management Company in 2011, to achieve synergies in asset management business and access to a wider distribution network. Pursuant to the merger, the name of the Company was changed to MCB-Arif Habib Savings and Investments Limited. MCB-AH caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of fifteen open-end funds and two voluntary pension schemes. MCB-AH is also managing one of the largest AUMs under the SMA segment and holds a significant position in the investment advisory domain.
The major shareholders of MCB-AH are MCB Bank Limited ~51%, Arif Habib Corporation Limited ~30%, and Adamjee Insurance Company Limited ~8%. The general public holds the remaining ~11% of the shares. MCB-AH's control vests in an eight-member board of directors, including the CEO. There are four non-executive directors, while three directors are independent. The AUMs (CIS & VPS) of MCB-AH increased to ~PKR 97,679mln at end-Jun'21 (Dec'20: ~PKR.82,721mln).