The Pakistan Credit Rating Agency Limited
08-Sep-23
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of AKD Cash Fund
| Rating Type | Stability Rating | |
|
Current (08-Sep-23 ) |
Previous (08-Mar-23 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA+(f) | AA+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
AKD Cash Fund ("AKD CF" or the "Fund") reflects the Fund's low-risk profile. The investment objective of the Fund is to provide optimum returns consistent with minimal risk from a portfolio constituted of high-quality short-term securities/instruments, which will provide liquidity. The Fund will invest in highly secure ('AA' and above) short-term debt instruments such that the WAM of its net assets will stay below 90 days. At the end of Jun'23, the exposure in T-bills was 81.63%, 12.87% in Commercial Papers / Short Term Sukuk (STS), and Cash was 4.92%. The Fund remained compliant with the criteria of assigned rating; minimum 50% of assets in Govt. Securities/AAA and maximum 25% in AA rated avenues. The WAM of the Fund stood at 69 days at the end of Jun'23; limiting the exposure to credit risk. The duration of the Fund was 69 days at the end of Jun’23, exposing the Fund to low-interest rate risk. As of Jun'23, the unit holding pattern of the Fund was ~76.81% representing top ten investor concentration; exposing the fund to redemption pressure. However, major investment in Govt. securities is providing enough liquidity to manage the redemption risk.
Going forward, the Fund intends to maintain/increase its exposure to Short Term Government Securities and Commercial Papers/Short Term Sukuk. 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
AKD Investment Management Limited commenced its operations in September 2004. The Company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The Company is sponsored by AKD Group Holdings (Private) Limited [Formerly: Aqeel Karim Dhedhi Securities(Private) Limited] (99.97% ownership). The Board of Directors of the Company comprises seven members, including the CEO Mr. Imran Motiwala, who has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The Company is currently managing eight open-end funds with assets under management of ~PKR 6.5bln at end of Jun'23.