The Pakistan Credit Rating Agency Limited
27-Jun-19
Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Upgrades Stability Rating of MCB DCF Income Fund
| Rating Type | Stability Rating | |
|
Current (27-Jun-19 ) |
Previous (28-Dec-18 ) |
|
| Action | Upgrade | Maintain |
| Long Term | AA-(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating reflects the fund's strong credit quality and sound liquidity profile emanating from sizable investments as daily cash balances. The portfolio of the fund at end Dec-18 primarily comprised cash balances (51%) with banks while 37% exposure was with TFCs. The remaining assets of the fund of ~1% were invested in T-Bills and ~11% were others including receivables. The unit holding pattern of the fund remains well diversified with top ten investors representing 34% of the fund's assets 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 TFCs, T-Bills and other debt instruments. 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.