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The Pakistan Credit Rating Agency Limited
Press Release

Date
30-May-18

Analyst
Muhammad Usman
muhammad.usman@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 Lakson Income Fund

Rating Type Stability Rating
Current
(30-May-18 )
Previous
(12-Jul-17 )
Action Maintain Maintain
Long Term A+(f) A+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The objective of the fund is to provide a competitive return on investment in a diversified portfolio of fixed income securities.
The rating reflects the fund's strong credit quality and good liquidity profile emanating from the sizeable allocation of assets in daily cash balances. At end-Dec 17, the portfolio comprised cash balances (78%) with the majority of exposure with 'AA+' rated banks. The remaining assets of the fund (i.e. 7%) were invested with TFCs and (9%) are other bank placements. The unit holding pattern of the fund is concentrated with the top10 investors representing ~84% of portfolio, however, fund has mitigated the redemption risk by staying highly liquid (78% in cash).

Going forward, the fund intends to maintain exposure in cash, some part of the investment in TFCs having good credit quality. 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.

About the Entity
Incorporated in January 2009, Lakson Investments is the investment management arm of Lakson Group, wholly owned through Siza Services (Private) Limited. Lakson Group has interests in multiple sectors including agri-business, consumer non-durables, fast food, information technology, insurance, media, paper & packaging, surgical instruments, and travel. The company is currently managing six open-end funds - covering Equity, Money Market, Income and Asset Allocation categories - with assets under management of PKR 16.7bln at end Dec-17 (PKR 14.1bln at end Dec-16). Additionally, it is managing 46 SMAs mandates amounting to ~ PKR 13.2bln (44 mandates and PKR 12.4bln at end Dec-16).

The eight-member BoD comprises four independent directors and four executives of group companies. The Chairman of Lakson Group, Mr. Iqbal Ali Lakhani, is the Chairman of Lakson Investment's board. The CEO, Mr. Babar Ali Lakhani, has vast investment management experience in local and foreign markets. Mr. Kashif Mustafa (COO), reporting directly to the CEO, is supported by nine departments consisting of Risk & Compliance, Investment, Research, Finance, Business Development, Marketing, IT, Operations and Admin.

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.