PACRA Maintains Stability Rating of First Habib Income Fund
|Rating Type||Stability Rating|
The objective of the fund is to achieve the best possible rate of return in comparison to the other available investment avenues by maintaining a diversified investment portfolio with easy entry and exit for the investors.
The rating incorporates the fund's moderate credit quality and liquidity profile, emanating from the fund's current portfolio mix. The fund has largely remained invested in bank placements. At the end of Jun-18, majority of the fund's assets were invested as cash ~31% and TDRs ~10%. Majority exposure is with banks rated 'AAA' ~3%, 'AA+' ~13%, 'A+' ~32%, 'A-' ~7%. The remaining assets of the fund were invested as MTS ~27%. The fund has low concentrated unit holding pattern with top 10 investors representing ~20% of the fund size at end-Jun’18.
Going forward, the management intends to maintain funds allocation towards MTS, while the remaining assets would be invested in good quality corporate debt instruments and cash with banks. 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 seven 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 4.4 billion at end Jun-18.