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The Pakistan Credit Rating Agency Limited
Press Release

Date
09-Sep-21

Analyst
Muhammad Junaid
muhammad.junaid@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 Alhamra Islamic Money Market Fund (Formerly: MCB Pakistan Frequent Payout Fund)

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

Alhamra Islamic Money Market Fund (or the ‘Fund’) is low risk-profile fund. The Fund’s rating reflects the Fund's strong credit and interest rate risk profile emanating from its investment strategy. At end Jun'21, the Fund had placed ~46% of its assets with commercial banks rated 'AA' and 'AAA'. The Fund had placed 42% of its net assets in Shariah Compliant bank placements and deposits. It had also invested ~8% of its funds in Shariah Compliant commercial papers. The weighted average maturity of the Fund was 35 days at end_Jun’21, which is in compliance with the investment policy. The duration of the fund remained within 45 days as at end-Jun'21. The Benchmark return of Fund will be the 3-month average deposit rate of 3 'AA' rated Islamic banks/Islamic windows of conventional banks. The Fund outperformed the benchmark during FY21 by a comfortable margin of 334 basis points. At end-Jun'21, the the fund's unit holding pattern was highly concentrated with top ten investors representing ~91% of the net assets; however, the highly liquid nature of Fund's assets is able to cope up the redemption pressure.
Going forward, the Fund will invest in accordance with its authorized investment policy and maintain its exposure in Shariah Compliant instruments, however the allocations will be diversified appropriately. Material changes in the Fund's asset allocation strategy, impacting it's credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
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).

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.