Analyst
Mohsin Naseer
mohsin.naseer@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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.