PACRA Assigns Stability Rating to Alhamra Cash Management Optimizer

MCB-Arif Habib Savings and Investments Limited ("MCB-AH" or the "Company") has recently launched Alhamra Cash Management Optimizer ("ALH CMOP" or the "Fund") to further capture the growing market share in shariah compliant money market funds and to enhance diversification in its fund slate. Currently, the market share of the Fund in this category is 0.5%. ALH CMOP is a low risk open ended shariah compliant money market fund with objective to provide competitive rate of return by investing primarily in liquid Shariah compliant money market avenues. The ratings reflect the Fund's moderate credit quality and high liquidity profile. As per the investment policy, the Fund can invest only in AA and above rated avenues with maximum maturities up to 6-months. However, the weighted average time to maturity of the net assets shall not exceed 90-days. The current size of the Fund is PKR ~2bln while at the end of May'23, the exposure in cash at banks was 99.0% with AA rated Islamic Banks and 0.5% with a AAA rated Islamic bank. The current asset allocation of the Fund depicts a weighted average time to maturity and duration of 01 days displaying very low credit risk and interest rate risk. The top ten investor concentration stood at ~74% at may'23, representing a high redemption pressure which the Fund is able to cope up owing to its superior liquidity profile.
Going forward, in accordance with the investment policy and assigned ratings, the Fund will increase exposure in government securities / AAA rated avenues to 50% and the remaining will be maintained in AA & AA+ rated avenues.
Significant changes in investment policy or decline in diversification among investment avenues may impact the assigned rating.

About the Entity
MCB-AH is a Public Listed Company, regulated by the SECP. The Company holds licenses for Asset Management, Investment Advisory, and Pension Fund Management catering to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of nineteen 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.
On April 18, 2023, MCB Bank Limited (MCB) has acquired 30.09% shares of MCB-AH from Arif Habib Corporation Limited (AHCL) increasing the shareholding in MCB-AH from 51.33% to 81.42% and AHCL no longer holding any shares in MCB-AH. Adamjee Insurance Company Limited holds ~8% shares and the general public holds remaining ~11% of the shareholding. 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 declined to PKR 153.8bln at end-May'23 (Dec'22: PKR 160bln).