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 Money Market 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 Money Market Fund (FMMF) seeks to provide stable and competitive returns in line with the money markets exhibiting low volatility consistent with capital preservation by constructing a liquid portfolio of low-risk short-term investments yielding competitive returns.
The rating reflects the fund's strong credit risk profile emanating from the fund's investment policy to invest in high credit quality investment avenues with very sound liquidity. At end Dec-18, almost the entire fund was invested as cash with banks whilst ~70% of the fund's assets were invested with banks rated 'AAA’. The unit holding pattern of the fund is concentrated with top 10 investors representing ~84% of the total fund size of which ~36% are owned investments, which reflects a moderate level of redemption risk.
Going forward, the fund intends to reduce its exposure toward the banks and move toward the short-term government securities instead. Meanwhile, the assets of the fund must be placed with the minimum credit ratings of 'AA'.
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.