PACRA Maintains Stability Rating of Pak Oman Advantage Islamic Income Fund

Pak Oman Advantage Islamic Income (or the "Fund") is a moderate risk profile Fund. The assigned rating reflects the Funds' moderate credit risk profile emanating from the Fund's investment policy to invest in avenues with sound liquidity. The objective of the Fund is to provide investors with competitive current income and long-term capital growth primarily by investing in a diversified portfolio of shariah compliant securities available for investment outside Pakistan subject to applicable laws. The AUMs of the Fund stood at PKR 213mln at the end Jun’24 (Dec’23: PKR 220mln). The credit quality of the Fund was ~36.6% in Govt Securities/AAA rated avenues, ~26.8% in AA avenues whereas ~38.42% in Single A rated avenues. The Fund had allocated ~65.4% in cash, ~16.5% in corporate sukuks, ~11.8% in GoP/Ijarah, whereas remaining invested in others at the end Jun’24. Since the investments of ~65.4% is in cash, the duration of the Fund stood at 153 days at end Jun'24. However, the Interest risk is manageable. The WAM of the Fund stood at 329 days at the end Jun’24, exposing high credit risk. However, credit risk is manageable due to investment in Govt securities. The unit holding pattern of the Fund is highly concentrated where ~93.4% is represented by top 10 investors. However, ~31.01% is of related party holding, keeping redemption pressure at moderate level. The Fund facing downward pressure due to non-compliance with the assigned rating criteria throughout the period.
Going forward, the Fund compliance with the assigned rating criteria would remain imperative. Any material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
Pak Oman Asset Management Company Limited was incorporated on July 28, 2006, as a public unlisted company. It is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a majority owned subsidiary of Pak Oman Investment Company Limited (98%). The remaining shareholders include Oman International Development Company (0.84%) and Bank Muscat (0.43%). The company’s Board of Directors comprises six members including the managing director of Pak Oman Investment Company, Mr. Bahauddin Khan. The board’s chairman H.H Juland Jaifer Salim Al-Said has over 15 years of experience at the Oman Investment Authority (OIA) (Previously known as State General Reserve Fund). The company’s diverse product slate includes nine open end funds as of Jun'24 belonging to all major categories. The AUMs of the Company stood at~3.7bln in the Jun'24.