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
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 Pak Oman Advantage Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (31-Dec-18 ) |
Previous (30-Jun-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | A(f) | A(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The primary Objective is to provide investor(s) with competitive current income and long term capital growth primarily by investing in a diversified portfolio of shariah compliant securities available for investment outside Pakistan subject to applicable laws.
The rating incorporates the fund's moderate risk asset allocation by investing ~46% investments in 'A+' rated and ~16% investments in 'A' rated investment avenues at end Jun-18. Fund's exposure with cash balances was ~54%, while remaining assets of the fund were invested in sukuks (~44%). The weighted average maturity of the fund is ~1.7 years.
Going forward, the management of the fund intends to gradually build portfolio of enhanced exposure to debt instruments. Meanwhile, the fund plans to remain invested in strong credit quality 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.
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.