The Pakistan Credit Rating Agency Limited
31-Dec-18
Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Upgrades Stability Rating of Pak Oman Government Securities Fund
| Rating Type | Stability Rating | |
|
Current (31-Dec-18 ) |
Previous (30-Jun-18 ) |
|
| Action | Upgrade | Maintain |
| Long Term | AA-(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The primary objective of Pak Oman Government Securities Fund (POGSF) is to provide its unit holders competitive returns from portfolio of investment with low credit risk with maximum possible preservation of capital via investing in government securities.
The rating reflects the fund's good credit quality and a sound liquidity profile emanating from the fund's policy to invest in investment avenues with a mix of short-term and long-term government securities. At end June-18, ~67% of the fund's exposure was in short term Government securities (T-bills) and the remaining portfolio was invested in TFCs (~27) and term deposits (~5%). ~67% of the portfolio is invested in AAA rated avenues which depicts strong credit quality. The duration of the fund stood at 0.09 days at end June-18. The weighted average maturity of the fund was below 2 years in the last quarter of FY18.
Going forward, the rating remains dependent on maintaining at least 70% allocation towards government securities (AAA rated) with portfolio duration not exceeding 2 years.
About
the Entity
Pak Oman Asset Management Company Limited was incorporated on July 28, 2006 as a public unlisted company. It is licensed by the Securities and Exchange Commission of Pakistan (SECP) to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. During the year, the company remained a majority owned subsidiary of Pak Oman Investment Company Limited (97%). The remaining shareholders include Oman International Development Company (1.2%), Bank Muscat (0.6%) and National Logistic Cell (1.2%).
The company’s Board of Directors (BoD) currently comprise eight members including the CEO, Mr. Adeel Ahmad Khan. The board’s chairman H.E. Yahya Bin Said Bin Abdullah Al-Jabri is the Minister of the Special Economic Zone Authority at A’Duqum, Sultanate of Oman. The company’s diverse product slate includes eleven open-end funds as at March-18 belonging to all major categories. Pak Oman has four open-end funds under its name, while seven open-end funds belonged to Askari Investment Management Limited which have now been acquired by Pak Oman Asset Management Company.