Analyst
Ayesha Tayyab
ayesha.tayyab@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains the Stability Rating of Alhamra Government Securities Fund
| Rating Type | Stability Rating | |
|
Current (05-Nov-26 ) |
Previous (16-Jun-26 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Alhamra Government Securities Fund (“ALHGSF” or “the Fund”) is categorized under a medium-risk profile, with the objective of seeking maximum possible rate of return through investment primarily in Shariah compliant Government Securities and Islamic banks and licensed Islamic banking windows of conventional banks. As of Sep’26, the Fund’s Assets Under Management (AUM) stood at PKR 896mln, compared to PKR 442mln as of Mar’26 (the last review), representing more than a doubling of fund size over the review period, indicative of growing investor interest in the Fund’s Shariah compliant government securities offering. In terms of asset allocation, approximately 53% of the portfolio was invested in GoP Ijarah Sukuks, 45% in cash, and ~2% in other receivables, reflecting a well-structured Shariah compliant portfolio anchored in sovereign-backed Islamic securities, complemented by a substantial cash allocation that provides a strong liquidity buffer. From a credit quality perspective, approximately 54% of the Fund’s assets were invested in Government Securities and AAA rated instruments, ~42% in AA+ rated instruments, ~2% in AA rated avenues, and ~2% in unrated exposures. The overall credit profile is considered very strong and fully compliant with the assigned rating criteria, with the bulk of exposures concentrated in the highest quality Shariah compliant instruments. The Fund’s Weighted Average Maturity (WAM) stood at 766 days as of Sep’26, driven primarily by the Fund’s significant allocation to longer-tenor GoP Ijarah Sukuks, reflecting high sensitivity to interest rate movements broadly consistent with the Fund’s medium-risk sovereign income mandate and its strategy of seeking maximum possible returns through longer-tenor Shariah compliant government securities. Meanwhile, the unit holding pattern reflects a moderate degree of concentration, with the top 10 investors accounting for ~66% of the Fund’s total holdings. While this exposes the Fund to moderate redemption pressure, the Fund’s substantial cash allocation of ~45% and the generally liquid nature of GoP Ijarah Sukuks provide adequate comfort regarding its ability to meet any potential redemption requirements in a timely and orderly manner. In terms of performance, the Fund delivered a one-year return of 7.18% against a benchmark return of 9.95%, reflecting an underperformance of approximately 277 basis points. This performance gap is broadly attributable to the Fund’s mark-to-market dynamics on its longer-tenor GoP Ijarah Sukuk holdings in the context of the prevailing interest rate environment during the review period.
Going forward, any material changes in the investment policy and/or compliance with the rating criteria for the assigned rating would have an impact on the rating.
About
the Entity
MCB Investment Management Limited (MCBIM) is a public listed company. It holds licenses for asset management, investment advisory, and pension fund management, catering to both Conventional and Shariah investment solutions. MCBIM manages a diversified portfolio, including 26 Open-End Mutual Funds and 4 Voluntary Pension Schemes, while also maintaining a leading position in Separately Managed Accounts (SMA) and investment advisory services. MCBIM’s major shareholders include MCB Bank Limited (~81.42%), Adamjee Insurance Company Limited (~7.59%), and the general public (~9.28%). Mr. Khawaja Khalil Shah serves as the Chief Executive Officer of the company. The Board comprises a balanced composition of 4 Non-Executive Directors and 3 Independent Directors, ensuring strong governance, objective decision-making, and alignment with regulatory best practices. The Company’s assets under management (AUM) have grown significantly, reaching approximately PKR 426 Billion as of Sep'26, reflecting its strong market presence and consistent growth in Pakistan’s asset management industry.