The Pakistan Credit Rating Agency Limited
18-Oct-19
Analyst
Afnan Iqbal
afnan.iqbal_old@pacra.com_old
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of Pak Oman Advantage Islamic Income Fund.
| Rating Type | Stability Rating | |
|
Current (18-Oct-19 ) |
Previous (18-Apr-19 ) |
|
| Action | Maintain | Maintain |
| Long Term | A(f) | A(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating incorporates the fund's moderate risk asset allocation by investing ~42% of fund's assets as cash balances at end Jun-19. Fund's exposure in Sukuks was 55% having a minimum credit rating of 'A'. The weighted average maturity of the fund was 507 days at end Jun-19. The unit holding pattern of the fund is highly concentrated where 99.69% is represented by the top 10 investors. However, 74% are own investments which reduce the risk of redemption pressure.
Going forward, the management of the fund intends to maintain its exposure in debt instruments which may impact the duration. Meanwhile, the fund plans to remain invested in sound credit quality 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
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 (97%). The remaining shareholders include Oman International Development Company (1.2%), Bank Muscat (0.6%) and National Logistic Cell (1.2%).
The company’s Board of Directors comprise seven members including the managing director of Pak Oman Investment Company, Mr. Bahauddin Khan. The board’s chairman H.E. Yahya Bin Said Bin Abdullah Al-Jabri is the Minister of the Special Economic Zone Authority at A’Duqum, Sultanate of Oman. The company’s diverse product slate includes eleven open-end funds as at July'19 belonging to all major categories. Pak Oman has four open-end funds under its name, while seven open-end funds belonged to Askari Investment Management Limited which were acquired by Pak Oman Asset Management Company.