The Pakistan Credit Rating Agency Limited
29-Feb-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 AL Habib Islamic Savings Fund
| Rating Type | Stability Rating | |
|
Current (29-Feb-24 ) |
Previous (01-Sep-23 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
AL Habib Islamic Savings Fund (or the "Fund") is an open-ended medium-risk profile Fund. The objective of the Fund is to provide competitive risk-adjusted returns to its investors by investing in a diversified portfolio of long, medium, and short-term Shariah Compliant debt instruments while taking into account liquidity considerations. The assigned rating reflects the Fund's moderate credit risk profile emanating from the Fund's Investment policy to invest in avenues with sound liquidity. The allocation of the Fund as of Dec'23 was ~40.2% in GoP Ijarah Sukuks, around ~56.5% cash in bank majority ~42.5% in AAA-rated avenues while the remaining ~14% in AA-rated avenues. However, ~3.29% was diversified into various other avenues. The duration of the Fund stood at 194 days at the end of Dec’23, exposing the fund to moderate interest rate risk. However, the WAM of the Fund stood at 257 days at the end of Dec’23, exposing the fund to high credit risk but comfort derives from investment in G-Sec/AAA-rated avenues. The top 10 investors' concentration of the Fund stood at ~66.55% at the end of Dec’23, limiting the redemption pressure.
Going forward, any material changes in the investment policy or devised rating criteria for the assigned rating would have an impact on the ratings.
About
the Entity
AL Habib Asset Management Limited ("AHAML") incorporated in September 2005 as an unlisted public company, is the fastest-growing Asset Management and Investment Advisory Company in Pakistan. The company is licensed by the Securities and Exchange Commission of Pakistan (SECP) to carry out these services under the Non-Banking Finance Companies Regulations. The Company is a wholly-owned subsidiary of Bank AL Habib Limited. The Board of Directors comprises six members. The CEO, Mr. Kashif Rafi, has vast experience expanding over 22 years in the field of Investments and Fund Management. The Company’s diverse product slate includes 7 conventional funds, 5 Shariah-compliant funds, 1 Shariah-compliant pension fund, and 1 conventional pension fund. As of Dec'23, the total net assets of AHAML stood at PKR 121.4bln.