The Pakistan Credit Rating Agency Limited
22-Mar-23
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Upgrades Stability Rating of Alfalah GHP Income Fund
| Rating Type | Stability Rating | |
|
Current (22-Mar-23 ) |
Previous (13-Oct-22 ) |
|
| Action | Upgrade | Maintain |
| Long Term | AA-(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating reflects the adequate risk profile of the Fund's credit and interest rate risk profile. At the end Dec'22, ~39.4%% of Funds assets were invested in TFC/Sukuk, ~25.7% of funds were exposed to T-Bills, ~16.9% in Banks, ~5.6% in CPs, ~4.9% in PIBs whereas remaining was invested in Others. During CY22, the Fund remained compliant with the credit quality criteria for the assigned rating and had investments, on average ~44% in Govt. securities which further provides comfort to the assigned rating upgrade. The WAM of the Fund was 748 days, at Dec'22, exposing the fund to credit risk which is manageable due to investment in the Govt. securities. The Duration stood at 72 days, at end Dec 22. The unit holding pattern of the Fund is highly concentrated with top ten investors representing ~81.13% of the Fund's assets, however, related party exposure is ~43% which is limiting the redemption pressure.
Going forward, the Fund intends to increase exposure in Govt. securities keeping in view the authorized investment allocations 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
Alfalah Asset Management Limited (Formerly: Alfalah GHP Investment Management Limited) was incorporated on October 18, 2004 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to manage open-ended mutual funds and offer investment advisory services. The Company was established as joint venture Non-Banking Finance Company by Bank Alfalah Limited and GHP Arbitrium. The Company provides a wide range of mutual funds and pension funds both in conventional and Shariah compliant category. The Company also provides investment advisory services to HNW individuals and corporate clients.
The Company’s board of directors comprises eight members including the Chairman and the Chief Executive Officer. The board is dominated by representatives of MAB Investments and Bank Alfalah Limited. The board has two independent and five non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 75bln at end Dec'22.