The Pakistan Credit Rating Agency Limited
28-Dec-18
Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of MCB Pakistan Sovereign Fund
| Rating Type | Stability Rating | |
|
Current (28-Dec-18 ) |
Previous (30-Jun-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The objective of the fund is to deliver income primarily from investment in government securities.
The rating reflects the fund's strong credit quality and a sound liquidity profile emanating from the fund's policy to invest 70% of asset in a mix of short-term and long-term government securities on a weighted average basis with weighted average maturity of not more than 4 years. At end Jun-18, fund's exposure in T-Bills was ~45% while ~3% of the net assets were invested in PIBs. Most of the fund’s exposure was in 'AA+' rated banks. The fund's exposure towards interest rate risk is reasonably within stated mandate. The unit holding pattern of the fund is less concentrated, with top ten investors representing ~41% of the fund's assets.
Going forward, fund intends to maintain exposure in government securities and cash balances. The rating remains dependent on maintaining at least 70% allocation towards government securities on a weighted average basis with portfolio weighted average maturity not exceeding 4 years.
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.