Analyst
Muhammad Junaid
muhammad.junaid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of MCB DCF Income Fund
Rating Type | Stability Rating | |
Current (09-Mar-22 ) |
Previous (09-Sep-21 ) |
|
Action | Maintain | Maintain |
Long Term | AA-(f) | AA-(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
MCB DCF Income Fund (or the ‘Fund’) is a medium risk-profile fund. The rating reflects the adequate strength of the Fund's credit and interest rate risk profile. The fund size grew by 18% in 2HCY21. At end-Dec'21, ~55% of Fund's assets were invested with banks primarily rated 'AAA'. The Fund had placed ~32% of its portfolio into government securities. It had invested the remaining 10% of the net assets into TFCs rated ‘AA’ and above. The weighted average maturity of the Fund is 1.7 years. At end-Dec'21, the average duration of the Fund was within 90 days. The unit holding pattern of the Fund is modestly concentrated with top ten investors representing ~30% of the Fund's assets.
Going forward, following the investment policy and market circumstances, the Fund may increase exposure in banks, spread transactions, and short-term government papers. 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
MCB-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a public listed company, regulated by the SECP. MCB-AH holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCB-AH caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of fifteen open-end funds and two voluntary pension schemes. MCB-AH is also managing one of the largest AUMs under the SMA segment and holds a significant position in the investment advisory domain.
The major shareholders of MCB-AH are MCB Bank Limited ~51%, Arif Habib Corporation Limited ~30%, and Adamjee Insurance Company Limited ~8%. The general public holds the remaining ~11% of the shares. Mr. Saqib Saleem is the CEO of the Company. MCB-AH's control vests in an eight-member board of directors, including the CEO. There are four non-executive directors, while three directors are independent. The AUMs (CIS & VPS) of MCB-AH increased to ~PKR 110,012mln at end-Dec'21 (Jun'21: ~PKR 97,679mln).