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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 Income Enhancement Fund

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

The objective of the fund is to deliver return from aggressive investment strategy in the debt and fixed income market.

The rating reflects sound credit quality and liquidity profile of the fund emanating from the portfolio composition of the fund. At end Jun-18, the fund's exposure with cash and TFCs was ~47% and ~39% respectively, while with PIBs was 1.4%. The net assets as cash is placed in banks having credit rating of minimum 'A-'. The remaining assets of the fund were invested with good quality TFCs rated 'AA-' and above. The unit holding pattern of the fund is moderately diversified with top ten investors accounting for ~45% of the fund's assets. 

Going forward, the management of the fund intends to maintain exposure towards cash, TFCs, government securities and other fixed income securities. The rating of the fund remains contingent upon managing the credit quality of the fund and impact of volatility in prices of assets.

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.