The Pakistan Credit Rating Agency Limited
29-Nov-18
Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of Lakson Money Market Fund
| Rating Type | Stability Rating | |
|
Current (29-Nov-18 ) |
Previous (29-May-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The investment objective of the Lakson Money Market Fund is to provide stable and competitive returns in line with the money market, exhibiting low volatility which is consistent with capital preservation by constructing a liquid portfolio of low risk short term investments.
At end Jun-18, fund's assets were ~88% invested as cash balances with banks and ~12% as placements with non-banking financial institutions rated AAA (88%) and AA+ (12%). At end Jun-18, fund has duration of 4 days. On monthly average basis, the duration remained within the assigned parameters. The unit holding pattern of the fund is highly concentrated with top ten investors representing 84% of the fund's asset which exposes the fund to a high redemption risk.
Going forward, the rating remains dependent on maintaining portfolio duration not exceeding 45 days. Meanwhile, the assets of the fund must be placed with minimum credit ratings AA+ 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.
About
the Entity
Lakson Investments Limited, the investment management company of the Lakson Group, was incorporated on January 02, 2009 as a public un-listed company. Lakson Group has interests in multiple sectors including agri-business, consumer non-durables, fast food, information technology, insurance, media, paper and packaging, surgical instruments, and travel. Lakson Investments is licensed to undertake Asset Management and Investment Advisory Services. The Company’s control vests in eight-member board, comprising four executives of group companies and four independent directors. The Chairman of the Lakson Group, Mr. Iqbal Ali Lakhani, is the Chairman of Lakson Investment’s board.
The company is currently managing six open-end funds in diversified categories with an aggregate AUM base of ~PKR 13.3 billion at end Oct-18. The company plans to diversify its fund slate by launching Private Equity and Venture Capital funds.