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 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.