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 Faysal Financial Sector Opportunity Fund
| Rating Type | Stability Rating | |
|
Current (12-Jul-17 ) |
Previous (27-Dec-16 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The fund's investment objective is to generate a competitive rate of return to its investors by investing in money market and debt instruments with major exposure in financial sector.
The fund's investment objective is to generate a competitive rate of return to its investors by investing in money market and debt instruments with major exposure in financial sector. The rating reflects sound credit quality and liquidity profile of the fund owing to sizeable investments high rated avenues. At end-May17, the fund is primarily invested in daily cash (i.e. 55.6%) with high credit quality banks [majority with 'AA-' (76.57%)], while remaining assets are invested in TFCs rated AA-. Fund carries redemption risk as the unit holding pattern of the fund is concentrated, with the top 10 investors representing 72% of the net assets.
Going forward, the fund intends to allocates its assets toward high quality financial sector TFCs and cash balances (rated 'AA-' and above) and the remaining net assets of the fund are placed with government securities. 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
Faysal Asset Management Limited (FAML), licensed to conduct asset management and investment advisory services, was incorporated in 2003 as an unlisted public limited company under company's ordinance, 1984. The major shareholder of FAML is Islamic Investment Company of the Gulf (Bahamas) Ltd (50% stake), followed by Faysal Bank Limited (30% stake). Mr. Razi Ur Rahman Khan, a director of FAML, holds the remaining 20% stake in FAML. Presently, the company is managing a diversified portfolio of nine open-end funds, with combined AUMs of PKR 7.7 billion at end-May'17
The CEO, Mr. Razi-ur-Rahman Khan, has extensive experience in domestic and international capital markets. He is supported by the experienced management staff