The Pakistan Credit Rating Agency Limited
08-Mar-24
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of Alhamra Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (08-Mar-24 ) |
Previous (08-Sep-23 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Alhamra Islamic Income Fund (or the "Fund") reflects the fund's medium-risk profile. The credit quality of the Fund was ~71.4% in Govt Sec./AAA, ~30.2% in AA and ~18% in A. At the end Dec’23, the Fund had allocated ~62.6% in GoP Ijara Sukuk. Whereas, ~18.4% in banks, ~11.3% was invested in Sukuks, ~3.8% in Govt backed Securities, and the remaining was invested in Others. The AUMs of the Fund stood at PKR 10,532mln at the end of Dec’23. While the WAM of Fund is also stood at 650 days, exposing the Fund to high credit risk. The duration of the fund stood at 254 days at end of Dec'23, exposing the fund to interest rate risk. The top 10 investor concentration of the fund stood at 27.12% at end of Dec'23, limiting the redemption pressure of the fund.
Going forward, the Fund will invest in accordance with its authorized investment policy and maintain its exposure in Shariah Compliant instruments, however the allocations will be diversified appropriately. Material changes in the Fund's asset allocation strategy, impacting it's credit quality and/or exposure to interest rate risk, would affect the rating. Risk may vary slightly from time to time considering the volatility of economic conditions.
About
the Entity
MCB Investment Management Limited (MCBIM or the "Company") is a Public Listed Company, regulated by the SECP. MCBIM holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCBIM caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of nineteen open-end funds and four voluntary pension schemes. MCBIM is also managing one of the largest AUMs under the SMA segment and holds a significant position in the investment advisory domain.
The major shareholders of MCBIM are MCB Bank Limited ~81.42%, and Adamjee Insurance Company Limited ~7.59%. The general public holds the remaining ~11% of the shares. Mr. Khawaja Khalil Shah is the CEO of the company. There are four non-executive directors, three directors are independent and one CEO. The AUMs of MCBIM stood at PKR 164bln at end-Dec'23.