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The Pakistan Credit Rating Agency Limited
Press Release

Date
17-Apr-19

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 Alfalah GHP Sovereign Fund

Rating Type Stability Rating
Current
(17-Apr-19)
Previous
(03-Dec-18)
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The investment objective of the Scheme is to provide an investment medium whereby investors can participate in a portfolio that will seek to generate a competitive income.

The rating reflects the fund's very good credit profile emanating from its investment strategy to invest at least ~70% of the net assets in Government Securities transactions based on quarterly average investment. At the end of Dec-18, fund’s exposure in T-Bills was ~52%. The remaining assets were invested in TFC/Sukuks ~6% and cash balance ~30% with banks majorly having 'AA-' rating. The unit holding pattern of the fund is diversified with top 10 investors representing ~70% of the fund's units of which ~33% is the group's own investments, which exposes the fund to a low level of redemption pressure.

Going forward, the management intends to maintain funds exposure towards good quality debt instruments, government securities, cash and term placements. 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
Alfalah GHP Investment Management Limited was incorporated amid October 2004, as a public limited company. The major shareholders of the company are Bank Alfalah Limited with ~ 40% stake followed by MAB Investment Inc with ~ 42% stake. The company commenced its operations in March 2005 and is registered as an Asset Management Company and Investment Advisor under the Non-Banking Finance Companies Regulations. The company operates through its head office in Karachi and have branches in the major cities. The company is currently managing a diverse product slate of twenty funds.

Company’s eight-member BoD includes the CEO along with two representatives of BAFL, one representative of GHP Beteligungen Limited, one representative of MAB Investments and two directors are independent. The board is chaired by Mr. Adeel Khalid Bajwa. He is the CEO of Dhabi Group based in Abu Dhabi, United Arab Emirates.

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.