Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
PACRA Maintains Stability Rating of Alfalah GHP Islamic Income Fund
Rating Type | Stability Rating | |
Current (13-Oct-23 ) |
Previous (13-Apr-23 ) |
|
Action | Maintain | Maintain |
Long Term | AA-(f) | AA-(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
Alfalah GHP Islamic Income Fund (or the "Fund") is a medium risk profile fund. The investment objective of Alfalah GHP Islamic Income Fund is to minimize risk, construct a liquid portfolio of shariah approved fixed-income investments, and provide competitive returns to the unit holders. The rating reflects the Fund's moderate credit risk profile emanating from its investment strategy. At the end of Jun'23 the Fund had allocated ~27.2% in Government securities (GOP Ijara Sukuk), ~44.9% in Corporate Sukuk in A+ rated and above, ~24.4% in Bank deposits, placements & other banking instruments in A+ rated and above. The duration stood at 64 days limiting the Fund exposure to low interest rate risk. Whereas the WAM of the Fund stood at 900 days at the end Jun’23, exposing the Fund to high level of credit risk, considering the investment in good credit rating avenues i.e ~61% in AA & above rated (including 27% in Government securities) the credit risk is at manageable level. The top 10 investors concentration of the Fund was ~33.5% at Jun’23, giving rise to a low level of redemption pressure.
Going forward, the Fund intends to maintain its current asset allocation. 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
Alfalah Asset Management Limited (Formerly: Alfalah GHP Investment Management Limited) was incorporated on October 18, 2004 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to manage open-ended mutual funds and offer investment advisory services. The Company was established as joint venture Non-Banking Finance Company by Bank Alfalah Limited and GHP Arbitrium. The Company provides a wide range of mutual funds and pension funds both in conventional and Shariah compliant category. The Company also provides investment advisory services to HNW individuals and corporate clients.
The Company’s board of directors comprises eight members including the Chairman and the Chief Executive Officer. The board is dominated by representatives of MAB Investments and Bank Alfalah Limited. The board has two independent and five non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 99.4bln at end June'23.