The Pakistan Credit Rating Agency Limited
12-Jul-17
Analyst
Mohsin Naseer
mohsin.naseer@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of Pak Oman Advantage Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (12-Jul-17 ) |
Previous (30-Dec-16 ) |
|
| Action | Maintain | Downgrade |
| Long Term | A(f) | A(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The mandate of the fund is to provide a reasonable rate of return to its unit holders and long-term capital growth by investing primarily in a diversified portfolio of Shariah compliant investment instruments.
The rating incorporates the change in fund's investment philosophy. At end-May17, fund's exposure with cash balances was 92% while remaining assets of the fund were invested in sukuks (i.e. 7%). Majority of the fund's assets were invested with 'A-' rated avenues (i.e. 82.68%). Fund possess robust liquidity profile emanating from the fund's weighted average maturity on the assigned parameters. The unit holding pattern of the fund is highly concentrated with top10 investors representing 99% of the fund's assets as at end-Dec-16.
Going forward, the management of the fund intends to gradually build portfolio of enhanced exposure to government securities. Meanwhile, the fund plans to remain invested in strong credit quality banks. 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.
About
the Entity
Pak Oman Asset Management Company Limited (POAMCL) is the management company for POGSF. The sponsors of POAMCL are Pak Oman Investment Company Limited (97%), Oman National Investment Corporation Holding (1.2%), National Logistics Cell (1.2%) and Bank Muscat (0.6%). The company is currently managing four mutual funds with AUMs of PKR 1.8bln at end-May17.
The CEO, Mr. Adeel Ahmed Khan joined as CEO of the company in Nov-15. He holds more than a decade experience in AMC industry. The fund manager, Mr. Meraj-Uddin, carries adequate experience in the domestic mutual fund industry.