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The Pakistan Credit Rating Agency Limited
Press Release

Date
28-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 Maintains Stability Rating of Pakistan Cash Management Fund

Rating Type Stability Rating
Current
(28-Dec-18 )
Previous
(30-Jun-18 )
Action Maintain Downgrade
Long Term AA+(f) AA+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The objective of the fund is to deliver regular income and provide high level of liquidity, primarily from short duration government securities investments.

The rating reflects the strength of the fund's credit and interest risk profile. The fund's good credit quality and sound liquidity profile emanates primarily from its mandate to invest in short-term government instruments. Meanwhile, the fund adheres to very conservative duration limit, ensuring low exposure to interest rate risk. At end June-18, the fund is invested in cash (~100%) in scheduled banks with strong credit quality (AA+ and above). Average duration of the fund and exposure in government securities remained in line with assigned parameters. The unit holding pattern of the fund has high concentration with top ten investors representing ~84% of the net assets which exposes the fund to high redemption pressure.

Going forward, the fund intends to maintain exposure towards cash balances and government securities having minimum AA+ credit 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 53bln 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.