The Pakistan Credit Rating Agency Limited
18-Apr-24
Analyst
Hassaan Ahmad
Hassaan.Ahmad@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of Atlas Islamic Income 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 Income Fund ("AIIF" or the "Fund") is a medium profile fund. The investment objective of the Fund is to seek preservation of capital and reasonable rate of return from a broadly diversified portfolio of long, medium and short term, high quality Islamic income instruments. The assigned rating reflects the Fund's low credit and interest rate risk profile emanating from its investment strategy. The Fund had allocated ~39.30% in Ijara Sukuks in AAA category, ~32.51% in Banks in A category, ~24.49% in Corporate Sukuks in AA category and ~3.70% was invested in others. The WAM of the Fund was 515 days at end of Dec’23, exposing the fund to credit risk. The Duration of the Fund stood at 76 days at end of Dec’23: limiting the interest rate risk of the fund. The top 10 investors concentration of the Fund, in Dec’23 was ~51.23% out of which ~17.28% is related party holdings, hence exposing the fund to moderate 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).