The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of Pak Oman Advantage Islamic Income Fund

Rating Type Stability Rating
(17-Aug-22 )
(17-Feb-22 )
Action Maintain Maintain
Long Term A+(f) A+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

Pak Oman Advantage Islamic Income Fund's (or the "Fund") is an open ended shariah compliant income Fund, managed by Pak Oman Asset Management Company Limited. The assigned rating incorporates the moderate risk profile of the Fund. At the end of Jun'22, the AUMs of the Fund were ~1,482mln (Dec'21: 1,225mln). The Fund had allocated ~58.2% in banks whereas ~14.5% in 5 years GOP Ijarah Sukuks, ~11.2% in CP and ~11.9% in TFCs. The Fund has invested ~15.2% in triple AAA, ~59.6% in double AA whereas ~19% in double AA+. The Fund has increased its exposures in cash and short term papers, resultantly the duration of the fund declined to 187 days at end Jun'22 (Dec'21: 535 days). The WAM of the Fund was 274 days in the end Jun'22 ( Dec'21: 661), this reflects high exposure to interest risk. The unit holding pattern of the fund is highly concentrated where ~97% is represented by top 10 investors. However, the related party holding is only ~8.38%. The Fund remained compliant with investment policy and rating criteria for the assigned rating.
Going forward, 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
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 Jun'22 belonging to all major categories.

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.