PACRA Assigns Initial Stability Rating to First Habib Islamic Income Fund
|Rating Type||Stability Rating|
The rating incorporates the fund's good credit quality and sound liquidity profile emanating from the fund's strategy to invest in good quality shariah compliant instruments. At end Jun-18, ~76% of the fund's net assets were invested as cash with banks, whilst ~21% were invested in sukuks rated 'A' and 'AA'. The fund has a well-diversified unit holding pattern, with top 10 investors representing ~93% of the fund size, of which ~71% are group’s own investments, which exposes the fund to a low level of redemption pressure.
Going forward, the fund intends to maintain its exposure in cash. 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.
HAML, incorporated in September 2005 as an unlisted public limited company, is licensed to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a part of Habib group, the oldest and a distinguished name in Pakistan’s banking circle, with interest in insurance, sugar, textile, auto, food and trade sectors. Habib family and associates, a distinguished name in Pakistan, owns around 70% of shareholding in the company, while Bank AL Habib being the single largest shareholder holds 30% stake in the company.
HAML’s BoD consists of five members, including the CEO. The CEO, Mr. Imran Azim, is an MBA and has profound experience in the mutual fund industry. The company is currently managing six open-end funds with assets under management of ~PKR 3.9 billion at the end of Nov-18.