PACRA Maintains Stability Rating of Alhamra Islamic Income Fund (Formerly: MCB Islamic Income Fund)
|Rating Type||Stability Rating|
The investment objective of the fund is to generate superior risk adjusted returns by investing in short, medium and long-term Shariah compliant fixed income instruments.
The rating incorporates the fund's strong credit quality and sound liquidity profile emanating from the fund's policy to invest only in good quality Shariah compliant instruments. At end-May17, 8.6% of the fund's net assets were invested with GoP Ijarah sukuks, whilst 82.3% were invested with banks rated 'AA-'. The remaining assets of the fund were invested in good quality corporate sukuks having credit rating of 'A'. Fund's whole exposure with 'A+' and above rating shows the strong credit quality of the portfolio. The fund has well diversified unit holding pattern, with top10 investors representing 26% of the fund size.
Going forward, the fund intends to maintain its exposure to government securities (above 40%) with rest of the fund's assets invested in Shariah compliant instruments rated A+ and above. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.
MCBAH is a subsidiary of MCB Bank Limited (MCB). MCB holds majority stake (51%) in the company, followed by Arif Habib Corporation Limited (30%). The company is managing fourteen open end mutual funds along with two pension schemes with AUMs of ~ PKR 47bln at end-Mar17. MCBAH also manages an SMA portfolio of ~ PKR 24bln. Sizeable chunk of this portfolio is related to an associated company. MCB, the fourth largest bank in Pakistan in terms of asset size and branch network, has a very strong financial position, evidenced by a long-term entity rating of AAA by PACRA. Arif Habib Corporation is the holding company for Arif Habib Group with interests in the financial and industrial sectors.
MCBAH’s eight members BoD, three representatives from MCB including CEO, two representatives from AHG and three are independent. Mian Muhammad Mansha - Chairman MCB - serves as the Chairman on the board. Mr. Nasim Beg - a representative of AHG - acts as the Vice Chairman. Mr. Saqib Saleem, former Chief Operating Officer and Company Secretary, is leading the AMC as Chief Executive Officer.