The Pakistan Credit Rating Agency Limited
02-Jul-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 Alfalah Islamic Money Market Fund
| Rating Type | Stability Rating | |
|
Current (02-Jul-24 ) |
Previous (28-Dec-23 ) |
|
| Action | Maintain | Initial |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Alfalah Islamic Money Market Fund (or the 'Fund') is a low-risk profile Fund. The Fund's investment objective is to generate regular and stable returns by investing primarily in Shariah-compliant banks and windows of conventional Banks and any other Shariah-compliant money market instruments. The AUMs of the Fund as of end Mar'24 was PKR 19,325mln. The credit quality of the Fund was strong at end-Mar'24, placing ~77% in AA rated avenues and ~16% in AAA rated category. At the end of Mar’24, the Fund had allocated ~77% in banks in the form of deposits and placements, ~19% in GOP Ijara sukuk, and the remaining was invested in others. The WAM of the Fund was 1 day at the end of Mar'24, limiting the exposure to credit risk. The Duration of the Fund stood at 62 days at end-Mar'24; representing low exposure to interest rate risk. The top 10 investors' concentration of the Fund at end-Mar'24 was ~59.77%, exposing the Fund to a high level of redemption pressure. Redemption pressure is addressed through maintenance of sufficient liquidity.
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
Alfalah Asset Management Limited (Formerly: Alfalah GHP Investment Management Limited) was incorporated on October 18, 2004 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to manage open-ended mutual funds and offer investment advisory services. The Company was established as joint venture Non-Banking Finance Company by Bank Alfalah Limited and GHP Arbitrium. The Company provides a wide range of mutual funds and pension funds both in conventional and Shariah compliant category. The Company also provides investment advisory services to HNW individuals and corporate clients.
The Company’s board of directors comprises eight members including the Chairman and the Chief Executive Officer. The board is dominated by representatives of MAB Investments and Bank Alfalah Limited. The board has two independent and five non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 158.65bln at end Mar'24.