logo
The Pakistan Credit Rating Agency Limited
Press Release

Date
12-Jul-17

Analyst
Mohsin Naseer
mohsin.naseer@pacra.com
+92-42-35869504
www.pacra.com

Applicable Criteria

Related Research

Disclaimer
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 Atlas Islamic Income Fund

Rating Type Stability Rating
Current
(12-Jul-17)
Previous
(09-Dec-16)
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating reflects strong credit quality and a robust liquidity profile of the fund emanating from its exposure in GoP Ijarah sukuks (3.6% at end-May17). The remaining assets of the fund were invested as cash with banks (94%) with highest exposure in 'AAA' rated banks (32.6%) and 'AA' rated banks. The exposure with sukuks was (2%) having rating of 'AA-' at end-May 17. At end-May17, the unit holding pattern of the fund is highly concentrated towards top 10 investors representing 75% of the fund, exposing the fund to redemption pressure.

Going forward, the fund intends to keep its exposure level as per above criteria. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.

About the Entity
Atlas Asset Management Limited (AAML), incorporated in August 2002 and a part of Atlas Group (AG), is a wholly owned (100%) subsidiary of Shirazi Investments (Pvt.) Limited (SIL) - the holding company of the Group. Atlas Group, established in 1962, is one of the well-known business groups of the country with presence in manufacturing, financial, and trading sectors. With an AUM base of PKR 32.3bln at May-17, AAML is currently managing seven open end funds; along with conventional and Islamic Pension Funds.

AAML's seven-member board of directors comprises four representatives of Atlas Group, two independent directors and the CEO. The Vice-Chairman & CEO of AAML, Mr. M. Habib-ur-Rahman is a veteran of the mutual fund industry. He has been associated with the company since 2004. Mr. M. Abdul Samad, Chief Operating Officer, has over sixteen years of experience in the field of Investment Management. The senior management team is well qualified with related experience and has demonstrated relative stability over the years.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.