The Pakistan Credit Rating Agency Limited
09-Apr-24
Analyst
Hassaan Ahmad
Hassaan.Ahmad@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of AWT Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (09-Apr-24 ) |
Previous (13-Oct-23 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
AWT Islamic Income Fund (or the "Fund") is a moderate risk profile Fund. The investment objective of the Fund is to generate competitive risk adjusted returns by investing in short, medium and long-term shariah compliant fixed income instrument. The assigned rating reflects the Fund's moderate credit risk profile emanating from its investment policy and asset allocation. At end-Dec'23, the Fund had allocated ~26% in Banks rated as AA- , ~1% in TFC/Sukuks, ~32% in Short Term Sukuks rated as AA+, ~20% in Certificate of Musharaka rated as AA, ~13% in Bai Muajjal, ~6% in GoP Ijarah Sukuk rated as AAA, whereas ~3% in others. The duration of the Fund stood at 46 days at the end Dec'23, limiting the Funds exposure to interest rate risk. The WAM of the Fund stood at 119 days at the end Dec'23, limiting the credit risk of the Fund. The top 10 investors concentration of the Fund, at Dec'23 was ~39%, giving rise to a moderate level of redemption pressure.
Going forward, any material changes in the investment policy and/or compliance with the devised rating criteria for the assigned rating would have an impact on the rating.
About
the Entity
AWT Investments Limited is a public unlisted company, incorporated in 2011. It is a Non-Banking Finance Company, licensed by the Securities and Exchange Commission of Pakistan to manage open and closed-end funds and Investment Advisory Services. The Company is a wholly owned subsidiary of Army Welfare Trust. The Board of Directors of the Company comprises five members. The CEO of the Company Mr. Sajjad Anwar. He is a CFA charter holder and has over 21 years of experience that involves Equity Research, Portfolio Management, Investment Advisory, Risk Management, and Finance & Accounts. For the last 15 years, he has been working in the Fund Management Industry. Before becoming CEO at AWTIL, he was performing the role of Chief Investment Officer at NBP Funds. The Company's six-member Board of directors includes five director and the CEO. With overall assets under management of PKR 14.433 bln at the end Dec'23, AWT Investment Limited now managing four conventional funds and two shariah complaint funds.