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The Pakistan Credit Rating Agency Limited
Press Release

Date
31-Dec-18

Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Assigns Initial Stability Rating to Alhamra Daily Dividend Fund

Rating Type Stability Rating
Current
(31-Dec-18 )
Action Initial
Long Term AA-(f)
Short Term -
Outlook Stable
Rating Watch -

Alhamra Daily Dividend fund’s investment objective is to meet investors’ short to medium term investment requirements. The scheme seeks to provide investors a daily dividend through investment in Shariah Compliant instruments.

The rating incorporates the fund's moderate credit quality and liquidity profile emanating from ~100% investments in banks as cash balances. At end Jun-18, ~97% of the fund's net assets were invested with bank having A- rating. Whilst ~2.9% of the fund's assets were invested with bank having AA- rating. The weighted average maturity of the fund and the duration is 1 day at end Jun-18 which implies low exposure to interest rate risk. The fund has less diversified unit holding pattern, with top ten investors representing ~63% of the fund size. 

Going forward, the fund intends to maintain its exposure towards bank placements having minimum of A- rating. 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
MCB Arif Habib Savings and Investments Limited was incorporated in August 2000 and listed on the Karachi Stock Exchange. It is a major player in the mutual fund industry of Pakistan. During June'11, 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 board of directors comprises two representatives from MCB, two representatives from Arif Habib Group, one member is the CEO CEO and three are independent directors. Mian Muhammad Mansha, Chairman MCB, serves as the Chairman on the board. Mr. Saqib Saleem is the CEO, having work experience of over thirteen years. With overall assets under management of ~ PKR 53 billion at end Oct-18, the company is currently managing sixteen open-end funds and two voluntary pension funds.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.