The Pakistan Credit Rating Agency Limited
30-Jun-18
Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Upgrade Stability Rating of MCB Cash Management Optimizer Fund
| Rating Type | Stability Rating | |
|
Current (30-Jun-18 ) |
Previous (12-Jul-17 ) |
|
| Action | Upgrade | Maintain |
| Long Term | AA+(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The investment objective of the fund is to earn a reasonable rate of return through the construction of a highly liquid and low-risk portfolio comprising treasury bills, money market placements and bank deposits.
The rating reflects the fund's low-risk profile emanating from its portfolio allocation towards low-risk avenues. At end-Dec-17 all of the funds assets were invested in cash (89.4%) and TDRs (9.9%) with banks rated AAA and AA+. The exposure with AAA banks was 73%, whereas, exposure with 'AA+' rated banks was 25.9%'. The unit holding pattern of the fund emanates moderate liquidity risk as top10 investors represent 52% of the fund's assets.
Going forward, the rating remains dependent on maintaining exposure with high credit quality financial institutions. Meanwhile, the remaining assets of the fund must be placed with scheduled banks having credit ratings 'AA+' and above. PACRA would monitor compliance against agreed parameters on the monthly average basis.
About
the Entity
MCB Arif Habib Savings & Investments Limited (MCBAH) incorporated in August 2000 and listed on the Karachi Stock Exchange, is a major player in the mutual fund industry of Pakistan. During Jun11, MCB Asset Management Company was merged into Arif Habib Investments. The objective was to achieve synergies in the asset management business and access a wider distribution network.
Company’s eight members BoD, two representatives from MCB, two representatives from Arif Habib Group, CEO and three are independent. Mian Muhammad Mansha, Chairman MCB, serves as the Chairman on the board. Mr. Saqib Saleem is the CEO, having working experience of over thirteen years. With overall assets under management of ~ PKR 53 billion, the company is currently managing sixteen open-end funds and two voluntary pension funds.