The Pakistan Credit Rating Agency Limited
09-Sep-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 MCB DCF Income Fund
| Rating Type | Stability Rating | |
|
Current (09-Sep-24 ) |
Previous (08-Mar-24 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
MCB DCF Income Fund (or the "Fund") is a medium risk profile Fund. The investment objective of the Fund is to deliver superior fixed income returns by investing in an optimal mix of authorized debt instruments while taking into account capital security and liquidity considerations. The credit quality of the Fund was ~85.8% in AAA or government rated securities, ~0.4% in AA, ~0.3% in AA-, ~0.1% in AA+ and ~13.4% in others. At the end of Jun'24, the Fund had allocated ~42.3% in T-Bills, ~20.7% in PIBs, ~10.6% in GoP Ijara Sukuk, ~8.1% in banks in the form of cash, ~2.9% in TFCs/Sukuks, ~2% in government backed securities and remaining was invested in others. The AUMs of the Fund stood at PKR 16,312mln at the end of Jun'24. While the WAM of Fund is stood at 949 days, exposing the Fund to high credit risk. The increase in WAM is mainly due to long term investment in Government Securities. The Duration of the Fund stood at 265 days, exposing the Fund to interest rate risk. The top 10 Investor Concentration stood at 57% at end Jun'24, keeping the redemption pressure moderate.
Going forward, any material changes in the investment policy or the devised rating criteria for the assigned rating would have an impact on the ratings.
About
the Entity
MCB Investment Management Limited (MCBIM or the "Company") is a Public Listed Company, regulated by the SECP. MCBIM holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCBIM caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of twenty two open-end funds and four voluntary pension schemes. MCBIM is also managing one of the largest AUMS under the SMA segment and holds a significant position in the investment advisory domain.
The major shareholders of MCBIM are MCB Bank Limited ~81.42%, and Adamjee Insurance Company Limited ~7.59%. The general public holds the remaining ~11% of the shares. Mr. Khawaja Khalil Shah is the CEO of the company. There are four non-executive directors, three directors are independent and one executive director (CEO). The AUMS of MCBIM stood at PKR 225bln at end-Jun'24.