The Pakistan Credit Rating Agency Limited
30-Jun-18
Analyst
Muhammad Usman
muhammad.usman@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 Upgrade Stability Rating of AKD Aggressive Income Fund
| Rating Type | Stability Rating | |
|
Current (30-Jun-18 ) |
Previous (12-Jul-17 ) |
|
| Action | Upgrade | Maintain |
| Long Term | A-(f) | BBB+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The investment mandate of the fund is to earn competitive returns for its unit holders by constructing a low risk and liquid portfolio. At end-Dec 17, fund has 6% exposure in Government securities while cash exposure is 51% with majority of exposure in ‘AA+’ rated bank and rest in ‘A’ rated bank. The fund's exposure towards TFCs/ sukuk represents 35% with TFC of the bank rated 'A-', 'AA-' and sukuks with rating 'A+'. The unit holding pattern of the fund is highly concentrated with top 10 investors (i.e. 94%) exposing fund to redemption pressure at end-Dec17. The fund's current asset mix highlights moderate credit risk profile. The assigned rating takes into account the fund's overall risk appetite which exposes fund towards high risk.
Going forward, fund intends to maintain its exposure with the same investment avenues. The fund will invest in debt instruments with rating not less than A-. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remain critical for the rating.
Draft P
About
the Entity
AKD Investment Management Limited, after acquisition of rights to manage Golden Arrow Selected Stocks Fund (GASSF), commenced operations in September 2004. The company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. Company is sponsored by Aqeel Karim Dhedhi Securities (Pvt) Limited (99.97% ownership). Aqeel Karim Dhedhi Securities (Pvt) Limited is majority owned by Mr. Aqeel Karim Dhedhi, Chairman of the AKD Group, a renowned figure in Pakistan's capital market. The remaining stake is held by four directors and an ex-CEO of the company.
The Board of Directors of the company comprise seven members, including its CEO. Mr. Imran Motiwala has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The company is currently managing six open end funds and one closed-end fund with assets under management of ~PKR 6.2 billion at end March-18.