PACRA Maintains Stability Rating of "Pak Qatar Monthly Income Plan" under Pak Qatar Islamic Income Fund

Pak Qatar Islamic Income Fund (or the "Fund") is an open-ended shariah compliant Income fund. The Fund falls under medium risk profile. The objective of the Fund is to maximize the investor's return by investing in shariah-compliant authorized investable avenues. The under-mentioned plans are initially offered under the umbrella of the Fund i) Pak-Qatar Income Plan ii) Pak-Qatar Monthly Income Plan and iii) Pak-Qatar Khalis Bachat Plan.
Pak-Qatar Monthly Income Plan (PQMIP or the "Plan") focus on corporate and high net worth investors who prefer monthly dividend under a stable Income category. The objective to invest in medium to long-term income instruments as well as short-tenor money market instruments to generate superior, long-term, risk-adjusted returns in accordance with Shariah practices. The term of the Plan is perpetual. As per the investment policy of the Plan, the Plan can't invest in below single A rated avenues. While as for as asset allocation is concerned, the Plan can invest up to 100% in shariah-compliant Govt. securities and cash at bank. The Plan may change the dividend frequency at its own discretion for the benefit of the unit holder with prior intimation.
At the end of Sep’23, the AUM size of this Plan was PKR 853mln (Jun’23: PKR 344mln). As of Sep'23, the Fund had allocated ~44.2% in mainly AA and above-rated banks in the form of deposits, ~44.8% in mainly A+ and above rated Corporate Sukuk and ~6.9% in GoP Ijara Sukuk. The duration of the Fund stood at 35 days at the end of Sep’23, limiting the exposure to interest rate risk. The WAM of the Fund stood at 362 days as of Sep'23, exposing the Fund to the high level of credit risk. Hence, the WAM is falling on high level since the investment in Government Ijara Sukuk and Corporate Sukuk. The unit holding pattern of the Fund stood at 100% at the end of Sep’23, representing top four investor concentration out of which ~75.33% are related parties; limiting the exposure to redemption pressure. Furthermore, the ability to meet redemption remained sound on the back of strong liquid profile. As of Sep'23, the Fund remained compliant with the credit quality criteria. The Fund's performance as of Sep'23 remained in line with the peers and gave an annualized return of 18.5%.
Going forward, any material changes in the investment policy or the devised rating criteria for the assigned rating would have an impact on the ratings. Risk may vary slightly from time to time considering the volatility of economic conditions.

About the Entity
Pak Qatar Asset Management Limited, established in 2021, is licensed by the SECP to carry out asset management and investment advisory business. The major shareholder of the Company is the holding company Pak Qatar Investment (PVT) Ltd which holds 52% of stake and remaining shareholder include FWU AG (20%), and Pak Qatar Family Takaful (5%). However, two board directors Mr. Owais Ansari and Mr. Kamran Saleem also hold 14% and 7%. The Company's board is composed of five members, with representation of two members from Pak Qatar Investment Limited, one representative of Pak Qatar Family Takaful Limited, one representative of FWU AG and one independent director. The CEO, Mr. Farhan Shaukat, FCA, has been associated with the group for over a decade heading Treasury function of the group. The AUMs of the Company stood at PKR 15.7bln at the end Sep’23.