The Pakistan Credit Rating Agency Limited
12-Jul-17
Analyst
Mohsin Naseer
mohsin.naseer@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of Atlas Sovereign Liquid Fund
| Rating Type | Stability Rating | |
|
Current (12-Jul-17 ) |
Previous (30-Dec-16 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The investment mandate of the fund is to provide competitive returns with low risk and high liquidity by investing primarily in short-term Government securities and good quality instruments.
The rating reflects the fund's investment philosophy. At end-May17, fund's exposure with Government securities was 98% whereas, remaining assets of the fund (i.e. 2%) were invested as cash with the banks rated 'AA'. Fund's monthly average exposure in Government securities and average durations remained in accordance with the assigned parameters. The fund carries very high redemption risk as unit holding pattern of the fund is highly concentrated with top10 investors representing 99% of the fund's assets.
Going forward, the rating remains dependent on maintaining at least 25% allocation towards government securities with portfolio duration not exceeding 90 days. Meanwhile, the remaining assets of the fund must be placed with scheduled banks having credit ratings 'AA' and above. PACRA would monitor compliance against agreed parameters on monthly average basis.
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.