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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 Alfalah GHP Sovereign 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 objective of the fund is to deliver optimal risk adjusted returns by investing mainly in a mix of short to long term government securities.

The rating reflects the fund's strong credit profile emanating from its investment policy to invest at least 70% of the net assets in Government Securities transactions based on quarterly average investment. At end-May17. Fund’s exposure in T-Bills was 76%. The remaining assets were invested in TFC/Sukuks (12%) and cash balance (11%) with banks having 'AA-' rating. On monthly average basis, fund maintained 70% exposure in Government securities in the last 2 quarters. Fund also maintained its duration of less than 2 years in the last 4 quarters. The unit holding pattern of the fund represents redemption risk as top 10 investors concentration was 54%.

Going forward, the rating remains dependent on maintaining at least 70% allocation towards government securities on monthly average basis with portfolio duration not exceeding 2 years. 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.

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.