The Pakistan Credit Rating Agency Limited
17-Nov-23
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Assigns Initial Stability Rating to ABL Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (17-Nov-23 ) |
||
| Action | Initial | |
| Long Term | A+(f) | |
| Short Term | - | |
| Outlook | Stable | |
| Rating Watch | - | |
ABL Islamic Income Fund (or the “Fund”) is a medium-risk profile Fund. The objective of the Fund is to provide investors with an opportunity to earn higher income over the medium to long term by investing in a diversified portfolio consisting of different money market and debt instruments permissible under the Shariah principles. The AUMs of the Fund stood at PKR 1071mln at the end of Oct’23 (Dec’22: PKR 2,228mln). As of the end Oct'23, the Fund's credit quality was ~17% in Government Securities/AAA, ~11.9% in double AA+, ~13.6% in double AA-, ~32.4% in single A+, and ~14.5 % in single A. The Fund had invested ~36.32% in Cash deposits, ~29.5% in corporate Sukuks, ~14.33 in government-backed securities, ~9.23% in Placements with Banks/DFIs whereas ~10.52% invested in others. The duration of the Fund was 11 days at the end of Oct’23, exposing low-interest rate risk. Since the Funds investment is in long-term government securities, hence the WAM stood at 1012 days at the end of Oct'23. The liquidity profile of the Fund is adequate. The unit holding pattern of the Fund stood at ~46%, representing the top ten investor concentration at the end of Oct'23. During the month of Oct’23, ABL Islamic Income Fund posted an annualized return of 15.32% against the Benchmark return of 7.17% thereby outperforming the Benchmark by 815 bps.
Going forward, the Fund intends to maintain its current asset allocation. Material changes in the fund's asset allocation strategy, impacting its credit quality would affect the rating.
About
the Entity
Incorporated in 2007, ABL AMC is a wholly owned subsidiary of Allied Bank Limited (ABL). ABL operates with 1,400 plus branches including 117 Islamic banking branches, 8 Digital/ Self Service branches & 2 overseas branches. ABL AMC possesses licenses for asset management, pension management and investment advisory services. As the leading private sector asset
management and investment advisory Company in Pakistan, offerings include a comprehensive range of both Conventional and Shariah Compliant investment solutions across all major asset classes. Assets under management of the Company stood at ~PKR 148bln at end Oct'23.