The Pakistan Credit Rating Agency Limited
17-Apr-19
Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
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PACRA Maintains Stability Rating of Faysal Financial Sector Opportunity Fund
| Rating Type | Stability Rating | |
|
Current (17-Apr-19 ) |
Previous (26-Dec-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Faysal Financial Sector Opportunity Fund (FFSOF) seeks to provide a competitive rate of returns to its investors by investing in money market and debt instruments with major exposure in financial sector instruments.
The rating reflects good credit quality and sound liquidity profile of the fund owing to sizeable investments in good quality avenues. At end of Dec-18, the fund is primarily invested ~89% in cash with high credit quality banks [majority with 'AA-' (~87%)], while remaining assets were invested in TFCs rated AA- and above. The unit holding pattern of the fund is concentrated with top 10 investors representing ~ 54% of total AUMs, which exposes the fund to a moderate level of redemption pressure.
Going forward, the fund intends to keep its exposure toward the same invested avenues. 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 was incorporated in 2003 as an unlisted public limited company under the company's ordinance, 1984. The major shareholding lies with Faysal Bank Limited having almost the entire stake in the company. During Nov-18, Faysal Bank Limited acquired ~50% stake from Bahamas Ltd and 20% from Mr. Razi Ur Rahman Khan – the former CEO of the company. The company is managing a diversified portfolio of nine open-end funds having AUMs of ~PKR 9.3 billion at end-Dec'18.
The former CEO, Mr. Razi-ur-Rahman Khan left the company amid Nov-18. During Dec-18, Mr. Latif has been appointed as the new CEO of Faysal Asset Management Limited. Mr. Latif has been associated with the capital markets for fifteen years. Mr. Latif is a LUMS Alumni and has done a number of capital market courses with CFA association, Daiwa, J.P. Morgan and Bahrain Institute of Banking and Finance (BIBF). He has also completed his Director certification program from IBA.