Analyst
Muhammad Zain Ayaz
zain.ayaz@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of Pak Oman Advantage Islamic Income Fund
Rating Type | Stability Rating | |
Current (17-Feb-22 ) |
Previous (17-Aug-21 ) |
|
Action | Maintain | Maintain |
Long Term | A+(f) | A+(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The rating incorporates Pak Oman Advantage Islamic Income Fund's (or the "Fund") moderate risk level. The Fund had allocated ~35% in GOP Ijarah Sukuks, ~45% in banks having rating ‘A-’ and ~13% in TFCs. The current investment strategy is in line with the investment policy, while the policy restricts the investments below 'A-' rated avenues. The average duration of the fund was 533 days at end Dec'21 (Jun'21: 135 days), this reflects high exposure to market risk warranting attention and cushion. The unit holding pattern of the fund is highly concentrated where ~97% is represented by top 10 investors. However, ~25% of the fund size are investments made by the Management Company itself and related parties which reduces 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, 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 comprise 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 Dec'21 belonging to all major categories.