Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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.