The Pakistan Credit Rating Agency Limited
22-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 ABL Islamic Cash Fund | Rating Watch Assigned
| Rating Type | Stability Rating | |
|
Current (22-Apr-24 ) |
Previous (30-Nov-23 ) |
|
| Action | Maintain | Initial |
| Long Term | AA+(f) | AA+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | Yes | - |
ABL Islamic Cash Fund (or the “Fund”) is a low-risk profile Fund. The objective of the Fund is to provide competitive returns by investing in low-risk and highly liquid Shariah-compliant money market instruments. They include T-Bills, commercial papers, certificate of deposits and repurchase agreements. The AUMs of the Fund stood at PKR 37,567mln at the end of Dec’23. The Fund had invested ~55.4% in banks rated in AA category, ~30.64% of placements with DFI/Banks rated in AA category, ~10.22% in Sukuks rated in AAA category, and the remaining in other avenues. The duration and the WAM of the Fund stood at 123 days at the end of Dec’23, exposing the fund to interest rate and credit risk. The Rating Watch signifies PACRA's ongoing surveillance due to Fund's deviation from the rating criteria from the assigned rating. The unit holding pattern of the Fund stood at ~61%, representing the top ten investor concentration; exposing the Fund to a medium level of redemption pressure. During the month of Dec’23, ABL Islamic Cash Fund posted an annualized return of 20.51% against the Benchmark return of 10.68% thereby outperforming the Benchmark by 983 bps.
Going forward, any material changes in the investment policy and/or compliance with the rating criteria for the assigned rating would have an impact on the ratings.
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 169.79bln at the end of Dec'23.