Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of Atlas Islamic Income Fund
Rating Type | Stability Rating | |
Current (15-Apr-22 ) |
Previous (15-Oct-21 ) |
|
Action | Maintain | Maintain |
Long Term | AA-(f) | AA-(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
Atlas Islamic income fund (or the "Fund") is medium risk profile. At the end Dec’21, the investment composition of the Fund was: ~18.7% in Corporate Sukuks rated A and above, ~15% in Ijara Sukuk, ~16% invested in ICPs. While ~34% were invested in banks rated A+ and above. During CY21, the overall credit quality of the Fund remained good, however it was not compliant with rating criteria for the assigned rating. The duration of the Fund was 104 days exposing the Fund to interest rate risk at end Dec'21. The WAM of the Fund is 628 days exposing the Fund to credit risk. The top 10 investors concentration of the Fund, at Dec’21 was ~56%, giving rise to a moderate level of redemption pressure.
Going forward, the Fund intends to maintain its exposure in cash and will look to invest in Sukuks. The Fund would also be intended to adhere to the credit quality for the assigned rating. Material changes in the Fund's asset allocation strategy, which could negatively impact the Fund's credit quality and exposure to interest rate risk, would remain critical for the rating.
About
the Entity
Atlas Asset Management Limited, incorporated in August 2002 and a part of Atlas Group, is a wholly owned (100%) subsidiary of Shirazi Investments (Pvt.) Limited - the holding company of the Group. Atlas Group, established in 1962, is one of the well-known business groups of the Country with a presence in manufacturing, financial, and trading sectors.
AAML's seven-member board of directors comprises four representatives of Atlas Group, two independent directors and the CEO. The CEO of the Company, Mr. Muhammad Abdul Samad, has completed the Advanced Management Program from INSEAD and holds postgraduate qualifications from the University of Karachi and the Southeastern University, he also holds certification from IFMP. He has been associated with the Company for over fifteen years and held C-Suite positions for over a decade. He has a significant Board experience, where he has served as a director on the board of nineteen listed companies, including Atlas Battery Limited, Lucky Cement, Berger Paints, Mirpurkhas Sugar, amongst others along with vast experience of the mutual fund industry. The Company is currently managing five conventional and five shariah compliant funds, along with two in the VPS category. The assets under management stood at ~PKR 52bln at end Dec'21.