PACRA Upgrades Stability Rating of "Pak Qatar Income Plan" under Pak Qatar Islamic Income Fund

Pak Qatar Islamic Income Fund (or the "Fund") is an open-ended shariah compliant Income fund. The Fund falls under medium risk profile. The objective of the Fund is to maximize the investor's return by investing in shariah-compliant authorized investable avenues. The under-mentioned plans are initially offered under the umbrella of the Fund i) Pak-Qatar Income Plan ii) Pak-Qatar Monthly Income Plan and iii) Pak-Qatar Khalis Bachat Plan.
Pak Qatar Income Plan under Pak Qatar Islamic Income Fund is a low risk profile Plan. The AUM size of this Plan was PKR 10,043mln at the end of Sep’24. The Fund asset quality is good. As of the end of Sep’24, Funds investment was ~61% in Govt Securities/AAA, ~13% in A+ rated avenues, ~12% in AA+ rated avenues, ~4% in AA rated avenues, ~3% in AA- rated avenues and ~2% in A rated avenues while the remaining was invested in other categories. At the end of Sep’24, most investment was held in Sukuk & Commercial Papers-Government (~39%) followed by Banks in the form of cash & placements (~38%), Sukuk & Commercial Papers-Corporate (~21%) and remaining was invested in others. The WAM of the Plan stood at 885 days at the end Sep’24, exposing the Fund to very high credit risk. The increase in WAM is mainly due to long term investment in Government Securities. The duration of the Fund was 72 days at the end Sep’24, exposing the fund to moderate interest rate risk. The rating upgrade of the Fund is due to the chosen investment strategy of the Fund being in line with the rating criteria for AA-, along with the Fund's good asset quality. The unit holding pattern of the Fund was ~97.20% representing top ten investor concentration; exposing the Fund to very high level of redemption pressure. The top 10 investors which includes related parties, diversified with granular participants, which act as major cushion in case of any aggressive redemption pressure by the remaining non related party. Besides overall investment remains marketable with enough liquidity to meet any redemption risks.
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
Pak Qatar Asset Management Limited, established in 2021, is licensed by the SECP to carry out asset management and investment advisory business. The major shareholder of the Company is the holding company Pak Qatar Investment (PVT) Ltd which holds 52% of stake and remaining shareholder include FWU AG (20%), and Pak Qatar Family Takaful (5%). However, two board directors Mr. Owais Ansari and Mr. Kamran Saleem also hold 14% and 7%. The Company's board is composed of five members, with representation of two members from Pak Qatar Investment Limited, one representative of Pak Qatar Family Takaful Limited, one representative of FWU AG and one independent director. The CEO, Mr. Farhan Shaukat, FCA, has been associated with the group for over a decade heading Treasury function of the group. The AUMs of the Company stood at PKR 36.9bln at the end of Sep'24.