The Pakistan Credit Rating Agency Limited
20-Jun-18
Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of Faysal Financial Sector Opportunity Fund
| Rating Type | Stability Rating | |
|
Current (20-Jun-18 ) |
Previous (12-Jul-17 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The fund's investment objective is to generate a competitive rate of return to its investors by investing in money market and debt instruments with major exposure in the financial sector.
The rating reflects sound credit quality and liquidity profile of the fund owing to sizeable investments in high rated avenues. At end-Dec17, the fund is primarily invested 80% in daily cash with high credit quality banks [majority with 'AAA' (60%)], while remaining assets are invested in TFCs rated AA-. The unit holding pattern of the fund is adequately diversified with top10 investors representing 51% of the fund's assets.
Going forward, the fund intends to allocate its assets towards high-quality TFCs and cash balances (rated 'AA-' and above). 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
Faysal Asset Management Limited (FAML) was incorporated in 2003 as an unlisted public limited company under company's ordinance, 1984. The major shareholder of FAML is Islamic Investment Company of the Gulf (Bahamas) Ltd (50% stake), followed by Faysal Bank Limited (30% stake). Mr. Razi Ur Rahman Khan, a director of FAML, holds the remaining 20% stake in FAML. Presently, the company is managing a diversified portfolio of nine open-end funds, with combined AUMs of PKR 8.2 billion at end-Dec'17
The CEO, Mr. Razi-ur-Rahman Khan has extensive experience in banking, mutual funds management, equity brokerage and private equity investment.