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The Pakistan Credit Rating Agency Limited
Press Release

Date
03-Dec-18

Analyst
Muhammad Usman
muhammad.usman@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 Alfalah GHP Income Fund

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

The investment objective of Alfalah GHP Income Fund (AGIF) is to minimize risk, construct a liquid portfolio of fixed income instruments and provide competitive returns to the Unit Holders. The management team shall ensure the active implementation of prudent investment practices, the highest professional standards and compliance with applicable laws.

The rating reflects the good credit quality of the fund's portfolio. The portfolio depicts diversification across asset classes. Fund took ~76% exposure in cash with banks. The majority of exposure was with banks rated 'AA+' and 'AA-' . The remaining ~22% assets of the fund were invested with TFCs having credit ratings of 'A+' and above. %). The unit holding pattern of the fund is concentrated with top 10 investors representing ~91% of the fund's assets, (of which ~67% are owned investments) which exposes the fund to a low level of redemption pressure.

Going forward, the fund intends to enhance its exposure towards cash with banks - rated 'AA-' and above. The remaining net assets of the fund would be placed with good quality TFCs/Sukuks. 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
Alfalah GHP Investment Management Limited was incorporated on October 18, 2004, as a public limited company. The major shareholders of the company are Bank Alfalah Limited with ~ 40% stake followed by MAB Investment Inc with ~ 42% stake. The company commenced its operations in March 2005 and is registered as an Asset Management Company and Investment Advisor under the Non-Banking Finance Companies Regulations. The company operates through its head office in Karachi and have branches in the major cities. The company is currently managing a diverse product slate of twenty funds.

Company’s eight-member BoD includes the CEO along with two representatives of BAFL, one representative of GHP Beteligungen Limited, one representative of MAB Investments and two directors are independent. The board is chaired by Mr. Adeel Khalid Bajwa. He is the CEO of Dhabi Group based in Abu Dhabi, United Arab Emirates.

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.