Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of AKD Cash Fund
Rating Type | Stability Rating | |
Current (08-Mar-22 ) |
Previous (04-Sep-21 ) |
|
Action | Maintain | Maintain |
Long Term | AA+(f) | AA+(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The rating of AKD Cash Fund (or the "Fund") reflects the fund's low risk profile, the Fund had allocated ~91% of fund's assets as Cash in Bank Accounts of which ~87% in bank having rating AA and ~4% in bank having rating AA+. As per the investment policy AKD cash fund can invest up to 100% as Cash in Bank Accounts having rating of AA and above. ~7% in Commercial Paper having rating AA and ~2% in others. Since Jun'21, the net assets of the Fund significantly increased by ~118% and stood at PKR 912mln. The unit holding pattern of the Fund is highly concentrated in top10 investors which represents ~88% of the fund's assets and exposing the Fund to redemption pressure. The investment policy of the Fund strictly prohibits the investments below AA rated avenues, the current strategy is in line with the investment policy. Weighted average maturity (WAM) of the Fund is capped at 6 days, while the duration remained 6 days, at Dec'21. The Fund remained compliant with the limit.
Going forward, the Fund intends to maintain/increase its exposure to short term liquid avenues, while the rating remains dependent on maintaining exposure with high credit quality financial institutions. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating, while credit quality and duration would remain imperative.
About
the Entity
AKD Investment Management Limited commenced its operations in September 2004. The Company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The Company is sponsored by AKD Group Holdings (Private) Limited [Formerly: Aqeel Karim Dhedhi Securities(Private) Limited] (99.97% ownership).
The Board of Directors of the Company comprises seven members, including the CEO Mr. Imran Motiwala, who has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The Company is currently managing seven open-end funds with assets under management of ~PKR 7bln at end Dec'21.