The Pakistan Credit Rating Agency Limited
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Muhammad Usman

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PACRA Maintains Stability Rating of PIML Income Fund

Rating Type Stability Rating
(17-Apr-19 )
(28-Dec-18 )
Action Maintain Maintain
Long Term A+(f) A+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The objective of the fund is to generate consistent returns with minimal risk by investing primarily in Government Securities, cash and near cash instruments.

The rating incorporates the fund's moderate credit quality and liquidity profile emanating from the fund's current portfolio mix. At the end of Dec-18, fund's exposure with banks was ~77% with majority of exposure in 'A-' rated banks. The remaining ~13% assets of the fund were invested in TFCs/ sukuks with the credit rating of 'A' and above. The unit holding pattern of the fund is concentrated with top 10 investors representing ~52% of the fund's assets, (of which ~19% are owned investments) which exposes the fund to a low level of redemption pressure.

Going forward, the fund intends to take some exposure toward government securities and Musharaka. The remaining assets of the fund will be placed as cash with banks. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.

About the Entity
AWT Investments Limited is a public unlisted company, incorporated in 2011. It is a Non-Banking Finance Company, licensed by the Securities and Exchange Commission of Pakistan to manage open and closed-end funds and Investment Advisory Services. The company is currently managing five open-end schemes with assets under management of ~PKR 1.7bln at end-Dec 2018. In the month of March 2017, Army Welfare Trust (AWT) acquired 70% shares of the company from Pak Brunei Investment Company Limited. On October 13, 2017, the Board of Directors of PBICL approved the disinvestment, remaining 30% shareholding in the company through the exercise of put option contained in shareholder’s agreement. The transaction was approved by the Commission on Mar 5, 2018, subject to completion of certain formalities. Subsequent to June 30, 2018, the remaining formalities were fulfilled and remaining shareholding of AWT Investments Limited was also transferred by PBICL to Army Welfare Trust.

The CEO, Mr. Salman Haider possesses over two decades of local and international experience in Investment management industry including almost 10 years on Wall Street in New York, USA. His experience on Wall Street included NASD licenses of series 7 and 63 along with working at reputable institutions within the investment management industry.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.