The Pakistan Credit Rating Agency Limited
24-Dec-24
Analyst
Hassaan Ahmad
Hassaan.Ahmad@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Assigns Initial Stability Rating to Atlas Islamic Cash Fund.
| Rating Type | Stability Rating | |
|
Current (24-Dec-24 ) |
||
| Action | Initial | |
| Long Term | AA(f) | |
| Short Term | - | |
| Outlook | Stable | |
| Rating Watch | - | |
Atlas Islamic Cash Fund ("AICF" or the "Fund") is a low‐risk profile Fund. The objective of the Fund is to provide competitive returns 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 good asset quality, low credit and interest rate risk profile emanating from its investment strategy. At end‐Oct'24, the Fund had allocated ~37.96% as Bank deposits, ~35.58% placed in Banks & DFI's, ~12.46% in corporate sukuks, ~12.44% in Govt. Ijara sukuks and the remaining was invested in others. The Fund had majorly invested in Govt Sec/AAA rated avenues(~64.03%), ~26.11% in AA+ and the remaining was invested in AA rated avenues. At end‐Oct'24, the WAM and duration of the Fund stood at 65 days, exposing the Fund to very low credit rate and interest rate risk. At end Oct'24 the unit holding pattern of the Fund was ~99.88%, representing top ten investor concentration; keeping very high level of redemption pressure. Redemption pressure is addressed through the maintenance of sufficient liquidity.
Going forward, 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 102.515bln at end Oct'24.