The Pakistan Credit Rating Agency Limited
13-Apr-23
Analyst
Wajeeha Asghar
wajeeha.asghar@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of AWT Income Fund
| Rating Type | Stability Rating | |
|
Current (13-Apr-23 ) |
Previous (13-Oct-22 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
AWT Income Fund (or the "Fund") is a medium risk profile Fund. The assigned rating reflects the medium credit quality and liquidity profile emanating from Fund's Investment strategy. The Fund had allocated ~42.4% in T-Bills, ~17.1% in TFCs rated A+ and above, ~8% in Corporate sukuks rated A+ and above, ~24.6% in cash majority in A+ rated bank whereas ~5.8% in commercial papers rated AA and ~2.1% in others. The duration of the Fund stood at 42 days at the end Dec’22, exposing low interest rate risk. The WAM of the Fund stood at 584 days at the end Dec’22, exposing high credit risk due to investment in long term TFCs. However, major investment in T-bills mitigate the overall credit risk. The top 10 investors concentration of the Fund, at the end Dec’22 was ~51.9%, giving rise to a moderate level of redemption pressure.
Going forward, any material changes in the Fund's asset allocation strategy, which could negatively impact the Fund's credit quality and exposure to interest rate risk, remain critical for the rating.
About
the Entity
AWT Investments Limited is a public unlisted company, incorporated in 2011. It is a Non-Banking Finance Company, licensed by the Securities and Exchange Commission of Pakistan to manage open and closed-end funds and Investment Advisory Services. The Company is a wholly-owned subsidiary of Army Welfare Trust. The Board of Directors of the Company comprises five members. The CEO of the Company Mr. Sajjad Anwar. He is a CFA charter holder and has over 21 years of experience that involves Equity Research, Portfolio Management, Investment Advisory, Risk Management, and Finance & Accounts. For the last 15 years, he has been working in the Fund Management Industry. Before becoming CEO at AWTIL, he was performing the role of Chief Investment Officer at NBP Funds. The Company's six-member Board of directors includes five director and the CEO. With overall assets under management of PKR 3.9bln at the end Feb'23, the company is recently launched new Fund AWT Financial Sector Income Fund on 19th Dec, 2022. AWT Investment Limited now managing four conventional funds and two shariah complaint funds.