The Pakistan Credit Rating Agency Limited
20-Mar-23
Analyst
Muhammad Azmat Shaheen
azmat.shaheen@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Assigns Initial Stability Rating to AKD Islamic Daily Dividend Fund
| Rating Type | Stability Rating | |
|
Current (20-Mar-23 ) |
||
| Action | Initial | |
| Long Term | AA(f) | |
| Short Term | - | |
| Outlook | Stable | |
| Rating Watch | - | |
AKD Investment Management Limited has recently launched AKD Islamic Daily Dividend Fund (the "Fund" or "AKDIDDF") to capture the growing market share and to further diversify its fund slate. AKDIDDF is a low risk open ended shariah compliant money market fund. The objective of the Fund is to provide competitive return in the form of daily dividend by investing in low risk and highly liquid Shariah compliant money market instruments. The ratings reflect the Fund's moderate credit quality and liquidity profile. As per the investment policy, the Fund can invest in AA and above rated avenues with maximum maturities up to 6-months. At the end Feb'23, the exposure in Commercial Papers/Short Term Sukuk was 14.51% and Cash was 84.13% with AA rated Islamic Bank. At end Feb'23, the Fund's weighted average time to maturity and duration stood at 27 days depicting very low credit risk and interest rate risk. The unit holding pattern of the Fund reflects high concentration as top 10 investors represent ~98% of the Fund's assets emanating high redemption risk.
Going forward, the Fund intends to maintain its position in Commercial Papers/Short Term Sukuk and Cash while building position towards AAA rated avenues. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect its rating. The assigned rating would remain dependent on the compliance with assigned rating criteria.
About
the Entity
AKD Investment Management Limited commenced its operations in September 2004. The Company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The Company is sponsored by AKD Group Holdings (Private) Limited [Formerly: Aqeel Karim Dhedhi Securities (Private) Limited] (99.97% ownership). The Board of Directors of the Company comprises six members, including the CEO Mr. Imran Motiwala, who has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The Company is currently managing eight open-end funds with assets under management of ~PKR 6.3bln at end Feb'23.