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