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 Alfalah GHP Money Market Fund
| Rating Type | Stability Rating | |
|
Current (12-Jul-17 ) |
Previous (30-Dec-16 ) |
|
| Action | Maintain | Upgrade |
| Long Term | AA+(f) | AA+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The fund's rating denotes a very strong capacity to manage relative stability in returns and very low exposure to risks. The investment mandate of the fund is to generate competitive returns consistent with low risk from major allocation towards high rated bank placements and debt instruments.
The rating reflects fund's investment philosophy of maintaining minimum 50% exposure in Government securities and AAA rated avenues. At the same time, AGMMF intends to have duration not exceeding 60 days. Fund possesses strong credit quality and sound liquidity profile. At end-May17, fund's 100% exposure was with banks as cash rated 'AA+' (11%) and 'AA' (9%). On monthly average basis, fund's exposure in Government securities remained above 50% in last 6 months and duration remained below 60 days. The unit holding pattern of the fund shows high redemption risk as 90% of the fund's assets were invested with top 10 investors.
Going forward, the rating remains dependent on maintaining the portfolio allocations towards the current stated level with strong credit quality. Any material deviation from the investment philosophy will negatively impact the stability rating of the fund. PACRA would monitor compliance against agreed parameters on monthly average basis.
About
the Entity
Commencing operations in Mar 05, Alfalah GHP Investment Management Limited (AGIML) is 82% owned by Abu Dhabi Group, including 40% through Bank Alfalah Limited (BAFL) and 42% through MAB Investments Inc. Meanwhile, GHP Arbitrium Holdings Limited (GHP) owns 14% stake. BAFL is the sixth largest commercial bank of the country with a branch network of over 500 branches. AGIML is currently managing sixteen open-end funds with cumulative assets under management of PKR 36bln at end-Mar17.
The company's six member BoD comprises CEO, two representatives of BAFL, one representative of GHP Arbitrium Holdings Limited, one representative of MAB Investments and one independent director. The board is chaired by Mr. Ali Sultan, Group Head - Treasury, Investments & Financial Institutions, Bank Alfalah Limited. The CEO of AGIML, Ms. Maheen Rahman, has over 17 years of rich local and international experience in the financial services. She is assisted by an able team.