The Pakistan Credit Rating Agency Limited
08-Mar-24
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of MCB Pakistan Sovereign 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 | - | - |
MCB Pakistan Sovereign Fund ( or the "Fund") reflects the Fund's medium-risk profile. The investment objective of the Fund is to deliver income primarily from investment in government securities. The credit quality of the Fund was ~80.1% in Govt/AAA and ~18.3% in double AA+. The Fund had allocated ~44% in T-Bills, 21.3% in GoP Ijara Sukuk, ~14.2% in PIBs, and ~18.9% invested in Banks. The AUMs of the Fund stood at PKR 11,896mln at the end of Dec’23. The WAM of the Fund was 584 days which is mainly due to long-term investment in Govt Sec; exposing the Fund to credit risk. The Duration of the fund stood at 389 at end of Dec'23, exposing the fund to interest rate risk. The top 10 investor concentration stood at 32.27% at end of Dec'23, keeping the Redemption pressure low for the fund.
Going forward, the Fund intends to maintain its asset allocation in government securities and banks, however, the allocations may be changed based on market circumstances. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
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