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
This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA
PACRA Maintains Stability Rating of Pakistan Income Enhancement Fund
| Rating Type | Stability Rating | |
|
Current (09-Mar-23 ) |
Previous (09-Sep-22 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Pakistan Income Enhancement Fund or the "Fund" is a medium-risk profile fund. The assigned rating reflects the moderate strength of the Fund's credit and interest rate risk profile. At end Dec'22, the Fund was largely invested in Government Securities with 75.2% of total assets while 19.3% was invested in TFCs/Sukuks, 3.9% in Cash at Banks and remaining was invested in others. At end Dec'22, Weighted Average to Maturity stood at 1.4 years mainly due to investments in government securities and corporate bonds. The Duration of Fund was 47 days depicting low interest rate risks. The unit holder concentration stood at ~46.4% with low redemption risks.
Going forward, the Fund may alter its allocation with banks and take a diversified exposure in term deposits and spread transactions keeping in view the 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).