The Pakistan Credit Rating Agency Limited
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Wajeeha Asghar

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PACRA Maintains Stability Rating of AL Habib Islamic Income Fund

Rating Type Stability Rating
(01-Sep-23 )
(02-Mar-23 )
Action Maintain Maintain
Long Term AA(f) AA(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

AL Habib Islamic Income Fund (or the "Fund") reflects the medium risk profile Fund. The objective of AHIIF is to provide competitive risk adjusted returns to its investors by investing in a diversified portfolio of long-, medium and short-term Shariah Compliant debt instruments while taking into account liquidity considerations. The assigned rating reflects the Fund's moderate credit risk profile emanating from Fund's Investment policy to invest in avenues with sound liquidity. The allocation of the Fund as of Jun'23 was ~ 63.1% cash in bank. Within this, 48.5% was in AAA rated avenues, and the remaining 14.6% was into AA rated avenues. However, ~11.5% allocation is in the form of TDR within bank rated AA+. Additionally, ~8.9% was in GoP Ijarah sukuk, around ~14.5% in Corporate Sukuk rated AA and above, and ~1.88% in various other avenues. The duration of the Fund stood at 22 days at the end Jun’23, limiting exposure to interest rate risk. whereas the WAM of the Fund stood at 487 days at the end Jun’23, exposing high credit risk. However, credit risk is high due to the major investment in Govt Securities. The top 10 investors concentration of the Fund stood at~90.1% at the end Jun'23 .
Going forward, any material changes in the investment policy or devised rating criteria for the assigned rating would have an impact on the ratings.

About the Entity
AL Habib Asset Management Limited ("AHAML") incorporated in September 2005 as an unlisted public company, is the fastest growing Asset Management and Investment Advisory Company in Pakistan. The company is licensed by the Securities and Exchange Commission of Pakistan (SECP) to carry out these services under the Non-Banking Finance Companies Regulations. The Company is a wholly-owned subsidiary of Bank AL Habib Limited. The Board of Directors comprises six members. The CEO, Mr. Kashif Rafi, has vast experience expanding over 22 years in the field of Investments and Fund Management. The Company’s diverse product slate includes 6 conventional funds, 5 shariah-compliant funds, 1 shariah compliant pension fund and 1 conventional pension fund. As of Jun'23, the total net assets of AHAML stood at PKR 64.3bln.

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.