The Pakistan Credit Rating Agency Limited
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Wajeeha Asghar

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PACRA Maintains Stability Rating of Askari High Yield Scheme

Rating Type Stability Rating
(17-Feb-23 )
(17-Aug-22 )
Action Maintain Maintain
Long Term A(f) A(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

Askari High Yield Scheme Fund (or the “Fund”) is a moderate risk profile Fund. The assigned rating reflects the Funds' moderate credit risk profile emanating from the Fund's investment policy to invest in avenues with sound liquidity. The Fund remained compliant with the given criteria of investing maximum 25% in single A- rated avenues. The Fund had allocated ~13.8% cash in banks majority in single bank rated A+, ~40.8% in TFCs rated A+ and above, ~2.2% in Sukuks rated AA+, ~18.3% in GoP Ijarah Sukuks whereas ~37% in PIBs at the end Dec’22. The duration of the Fund stood at 606 days at end Dec'22 (Jun'22: 198 days), exposing high level of interest risk whereas the WAM of the Fund stood at 1,001 days at the end Dec’22 (Jun'22: 558 days), policy rate hike an upward pressure exposing high credit risk. Consequently, In Jan'23 redemptions were honors post rate hike, which reduced the risk and adjusted the duration to 227 days whereas WAM of the Fund to 652 days. The unit holding pattern of the Fund is highly concentrated where ~83% is represented by top 10 investors. The Fund would remain exposed to redemption pressure.
Going forward, the Fund compliance with the assigned rating criteria would remain imperative. Any 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
Pak Oman Asset Management Company Limited was incorporated on July 28, 2006 as a public unlisted company. It is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a majority owned subsidiary of Pak Oman Investment Company Limited (98%). The remaining shareholders include Oman International Development Company (0.84%) and Bank Muscat (0.43%). The company’s Board of Directors comprises six members including the managing director of Pak Oman Investment Company, Mr. Bahauddin Khan. The board’s chairman H.H Juland Jaifer Salim Al-Said has over 15 years of experience at the Oman Investment Authority (OIA) (Previously known as State General Reserve Fund). The company’s diverse product slate includes nine open end funds as at Dec'22 belonging to all major categories. The AUMs of the Company stood at~9.3bln in the Dec'22.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.