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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

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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 AKD Aggressive Income Fund

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

The investment mandate of the fund is to earn competitive returns for its unit holders by constructing a low risk and liquid portfolio. At end-May 17, fund has 21% exposure in Government securities while cash exposure is 18% with majority of exposure in ‘AA+’ rated banks and rest in ‘A-’ Rated banks. The fund's exposure towards TFCs/ sukuk represents 18% with TFC of the bank rated 'A-' and sukuks with rating 'AA-' and 'A+'. Fund has also invested its assets in spread transactions (17%). The unit holding pattern of the fund is highly concentrated with top 10 investors (i.e. 90%) exposing fund to redemption pressure at end-May17. The fund's current asset mix highlights low credit risk profile. The assigned rating takes into account the fund's overall risk appetite which exposes fund towards high risk.

Going forward, fund intends to maintain its exposure with the same investment avenues. The fund will invest in debt instruments with rating not less than BBB+. 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
AKD Investment Management Limited (AKDIML), after acquisition of rights to manage Golden Arrow Selected Stocks Fund (GASSF), commenced operations in Sep-04. AKDIML is sponsored by Aqeel Karim Dhedhi Securities (Pvt) Limited (AKDSPL). AKDSPL owns 99.97% shares of AKDIML. The remaining stake is held by four directors and an ex-CEO of the company. AKDSPL is majority owned by Mr. Aqeel Karim Dhedhi - Chairman of the AKD Group - a renowned figure in Pakistan's capital market. Presently, the company is managing four open-end funds and one close-end fund with AUM of PKR 7.7bln at end-May17.

The CEO of AKDIML Mr. Imran Motiwala has been serving as the Chief Executive Officer since 2009. He is a marketing graduate from Southeastern University and a Certified Director from the Pakistan Institute of Corporate Governance. Fund Manager, Abdul Rehman is currently working as a Fund Manager at AKD Investment Management Limited. He is a graduate from IBA Karachi.

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.