The Pakistan Credit Rating Agency Limited
09-Mar-23
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 Pakistan Cash Management Fund
| Rating Type | Stability Rating | |
|
Current (09-Mar-23 ) |
Previous (09-Sep-22 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA+(f) | AA+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Pakistan Cash Management Fund or the "Fund" is a very low risk-profile fund. The rating reflects the Fund's good credit quality, very low interest rate risk and sound liquidity profile emanating primarily from its mandate to invest in government securities and other low duration avenues such as bank placement's and ensuring low exposure to interest rate risk. At end Dec'22, the portfolio was largely invested in Government Securities of ~67.9%, ~11.1% in placements with Banks & DFIs, 9.4% in Term Deposit Receipts, 6.1% in Banks, 4.5% in Short Term Sukuk while remaining was invested in others. The Weighted Average to Maturity was 38 days and duration at 33 days at end Dec'22, limiting the exposure to credit risks and interest rate risks. The Fund's unit holding pattern is moderately concentrated with top 10 investors representing 56.3% of the net assets.
Going forward, the Fund may shift its asset allocation in moderate tenor government securities, subject to economic and market expectations. 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-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a Public Listed Company, regulated by the SECP. MCB-AH holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCB-AH caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of eighteen open-end funds and two voluntary pension schemes. MCB-AH 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 MCB-AH are MCB Bank Limited ~51%, Arif Habib Corporation Limited ~30%, and Adamjee Insurance Company Limited ~8%. The general public holds the remaining ~11% of the shares. Mr. Saqib Saleem is the CEO of the company. MCB-AH's control vests in an eight-member board of directors, including the CEO. There are four non-executive directors, while three directors are independent. The AUMs (CIS & VPS) of MCB-AH increased to PKR 160bln at end-Dec'22 (Jun'22: PKR 122bln).