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The Pakistan Credit Rating Agency Limited
Press Release

Date
27-Jun-19

Analyst
Masooma Zahid
masooma.zahid@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 Alhamra Islamic Income Fund

Rating Type Stability Rating
Current
(27-Jun-19)
Previous
(28-Dec-18)
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating incorporates the fund's moderate credit quality and liquidity profile emanating from the fund's policy to invest only in good quality Shariah compliant instruments. At end Dec-18, 19% of the fund's net assets were invested in sukuks, whilst 52% were invested in banks as cash balances. The remaining assets of the fund were invested in commercial papers and deposits. Fund's exposure of ~46% with 'AAA'' and ~19% with 'AA' rated avenues shows the good credit quality of the portfolio. The fund has moderately diversified unit holding pattern, with top ten investors representing 65% of the fund size at end Dec-18.
Going forward, the fund intends to maintain its exposure towards bank placements with rest of the fund's assets invested in GoP Ijara Sukuks and other debt securities. 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
MCB Arif Habib Savings and Investments Limited (MCBAH), incorporated in August 2000 and listed on the Pakistan Stock Exchange, is a major player in the mutual fund industry of Pakistan. In June 2011, MCB Asset Management Company was merged into Arif Habib Investments. The objective was to achieve synergies in asset management business and access a wider distribution network.

The Company's Board has seven members. Two representatives are from MCB, two representatives from Arif Habib Group, two are independent and the CEO. Mian Muhammad Mansha, Chairman MCB, serves as the Chairman of the Board. Mr. Saqib Saleem is the CEO, having work experience of over thirteen years. With overall assets under management of ~PKR47 bln at end Feb’19, the Company is currently managing fifteen open-end funds and two voluntary pension funds.

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.