Analyst
Hassaan Ahmad
Hassaan.Ahmad@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of Pak Oman Income Fund (Formerly Pak Oman Government Securities Fund)
Rating Type | Stability Rating | |
Current (16-Aug-24 ) |
Previous (16-Feb-24 ) |
|
Action | Maintain | Maintain |
Long Term | A+(f) | A+(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
Pak Oman Income Fund (or the “Fund”) is a moderate risk profile Fund. The objective of the Fund is to provide its unit holders competitive returns from portfolio of investment with low credit risk with maximum possible preservation of capital via investing in Government Securities. 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 AUMs of the Fund stood at PKR 1,401mln at the end Jun’24 (Dec’23: PKR 2,518mln). Moreover, the Fund had allocated ~57.9% in GoP/Ijarah, ~32.7% cash in bank placements whereas ~3.5% in TFC/Sukuk at the end Jun’24. The Credit Quality of the Fund comprises of ~32.56% in A+ rated avenues and ~57.9% in AAA rated Avenues at the end Jun'24. The duration of the Fund stood at 66 days at end Jun'24 (Dec'23: 64 days), limiting the exposure to interest rate risk whereas the WAM of the Fund stood at 1,113 days at the end Jun’24 (Dec'23: 17 days), exposing very high credit risk. Credit risk is managed through placements in government securities. The unit holding pattern of the Fund is highly concentrated where ~99.9% is represented by top 10 investors, depicting very high redemption pressure. Redemption pressure is managed through maintenance of sufficient liquidity.
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 at Jun'24 belonging to all major categories. The AUMs of the Company stood at ~3.7bln in the Jun'24.