The Pakistan Credit Rating Agency Limited
18-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 Atlas Islamic Money Market Fund
| Rating Type | Stability Rating | |
|
Current (18-Apr-24 ) |
Previous (18-Oct-23 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Atlas Islamic Money Market Fund (or the "Fund") is a low-risk profile fund. The investment objective of the Fund is to provide competitive return to its investors with a periodic payout by investing in low risk, highly liquid and short duration portfolio consisting of Shariah Compliant money market instruments. The assigned rating reflects the Fund's low credit and interest rate risk profile emanating from its investment strategy. The Fund had allocated ~43.5% in banks in AAA category, ~34.92% in placement with banks/DFIs in AA category, ~17.5% in TFC/Sukuks in AA category, ~1.72% in Ijara Sukuk in AAA category while remaining was invested in others at the end of Dec'23. The WAM and Duration of the Fund both stood at 61 days at the end of Dec'23, limiting the credit risk and interest rate risk of the fund. The top 10 investors concentration of the Fund, in Dec’23 was ~60.78%, exposing the Fund to high redemption pressure.
Going forward, the material changes in the Fund's asset allocation strategy, which could impact the Fund's credit quality and exposure to interest rate risk, would remain critical for the rating.
About
the Entity
AAML, incorporated in August 2002, is a wholly owned subsidiary of Shirazi Investments (Pvt.) Limited – the holding company of Atlas Group. Atlas Group, founded in 1962 with the establishment of Shirazi Investments, is a diversified group with having presence in manufacturing, power, financial services, and trading. The Company’s seven-member Board of Directors comprises five representatives of Atlas Group including the CEO, the other two are independent directors. Mr. Iftikhar H. Shirazi serves as the Chairman of the Board of Directors of AAML along with several other companies of the Group. The board has three committees to provide oversight on the Company’s affairs: 1) Audit Committee, 2) Human Resource & Remuneration Committee, and 3) Investment Committee. The Company had AUMs of PKR 71.120bln at end Dec'23 (Dec'22: ~PKR 49.02bln).