The Pakistan Credit Rating Agency Limited
18-Apr-24
Analyst
Hassaan Ahmad
Hassaan.Ahmad@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of Atlas Income Fund
| Rating Type | Stability Rating | |
|
Current (18-Apr-24 ) |
Previous (18-Oct-23 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Atlas Income Fund ("AIF" or the "Fund") is a medium profile fund. The investment objective of the Fund is to earn a competitive return while preserving capital by investing in good quality corporate debt instruments, bank deposits and government securities. The assigned rating reflects the Fund's low credit and interest rate risk profile emanating from its investment strategy. The Fund had allocated ~69.3% in Government Securities (PIBs, Floater PIBs & T Bills), ~13.97% in bank deposits in AA category, ~12.8% in TFC/Sukuk in A category, while remaining was invested in others at the end of Dec'23. The duration of the Fund stood at 163 days at end Dec'23, limiting the interest rate risk of the fund. The WAM of the Fund stood at 558 days at the end Dec'23, exposing the fund to high credit risk. However, since the investment in long term Govt papers, the credit risk is manageable. The Fund remained compliant with the rating criteria for the assigned ratings. The unit holding pattern of the Fund concentration were ~92.79% represented by top ten investors out of which ~71.41% is related party holdings, limiting the redemption pressure of the fund.
Going forward, the material changes in the Fund's asset allocation strategy, which could impact the Fund's credit quality and exposure to interest rate risk, would remain critical for the rating.
About
the Entity
AAML, incorporated in August 2002, is a wholly owned subsidiary of Shirazi Investments (Pvt.) Limited – the holding company of Atlas Group. Atlas Group, founded in 1962 with the establishment of Shirazi Investments, is a diversified group with having presence in manufacturing, power, financial services, and trading. The Company’s seven-member Board of Directors comprises five representatives of Atlas Group including the CEO, the other two are independent directors. Mr. Iftikhar H. Shirazi serves as the Chairman of the Board of Directors of AAML along with several other companies of the Group. The board has three committees to provide oversight on the Company’s affairs: 1) Audit Committee, 2) Human Resource & Remuneration Committee, and 3) Investment Committee. The Company had AUMs of PKR 71.120bln at end Dec'23 (Dec'22: ~PKR 49.02bln).