The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Usman

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PACRA Maintains Stability Rating of First Habib Income Fund

Rating Type Stability Rating
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The objective of the fund is to achieve the best possible rate of return in comparison to the other available investment avenues by maintaining a diversified investment portfolio with easy entry and exit for the investors.

The rating incorporates the fund's average credit quality and liquidity profile emanating from the fund's current portfolio mix. The fund has largely remained invested in debt instruments. At the end of Dec-18, majority of the fund's assets were invested as cash with banks ~23%. Majority exposure is with bank rated 'A' ~21%. The remaining assets of the fund were invested as MTS ~16%. The fund has a moderate level of concentration with top 10 investors as they represent ~66% of the fund size at end-Dec’18.

Going forward, the management intends to maintain funds allocation towards MTS, while the remaining assets would be invested in good quality corporate debt instruments and cash with banks. 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
HAML, incorporated in September 2005 as an unlisted public limited company, is licensed to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a part of Habib group, the oldest and a distinguished name in Pakistan’s banking circle, with interest in insurance, sugar, textile, auto, food and trade sectors. Habib family and associates, a distinguished name in Pakistan, owns around 70% of shareholding in the company, while Bank AL Habib being the single largest shareholder holds 30% stake in the company.

HAML’s BoD consists of seven members, including the CEO. The CEO, Mr. Imran Azim, is an MBA and has profound experience in the mutual fund industry. The company is currently managing six open-end funds with assets under management of ~PKR 3.8bln at end Dec-18.

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.