The Pakistan Credit Rating Agency Limited
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Afnan Iqbal

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PACRA Maintains Stability Rating of Faysal MTS Fund (FMTSF)

Rating Type Stability Rating
(16-Oct-20 )
(17-Apr-20 )
Action Maintain Upgrade
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The Faysal MTS Fund, first of its kind in the industry, primarily maintained an exposure of ~82% in the MTS market at end Jun'20. The cash balances of the fund were majorly placed in 'AA-' and above rated banks. The fund also had an exposure of ~10% in T-Bills. The rating incorporates the volatile nature of the equity market in Pakistan, which impacts the NAV stability of the fund as the major part of the investments are in MTS.
Going forward, the fund intends to take some exposure in T-Bills and increase allocation in banks, and remaining assets will be invested in the relatively limited MTS market in Pakistan. Material changes in the funds asset allocation strategy, which could negatively impact the funds credit quality and exposure to interest rate risk, remain critical for the rating.

About the Entity
Faysal Funds (Faysal Asset Management Limited) is a subsidiary of Faysal Bank Limited (FBL). FBL is holding 99.99% shares of Faysal Funds. Faysal Funds was incorporated in Pakistan under the Companies Ordinance, 1984 on August 6, 2003 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services.

The Board of Directors of the Company comprises six members, including the Chairman Mr. Salman Ahmed Usmani. He has a rich experience of over three decades in the local as well as multinational banking sector. Mr. Khaldoon bin Latif was appointed as the CEO of the Company in Dec’18. Mr. Latif has been associated with the capital markets for over 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). The Company is managing a diversified portfolio of funds, with AUM’s of ~PKR 30bln at end Jun'20.

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.