The Pakistan Credit Rating Agency Limited
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Muhammad Zain Ayaz

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PACRA Maintains Stability Rating of First Habib Islamic Income Fund

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

The rating of First Habib Islamic Income Fund (or the "Fund") reflects the funds medium risk profile. At end Dec’20, majority of the fund's assets were invested in bank placements/deposits (~39%) while the rest are allocated in Sukuks (~26%), and GOP ijarah (~15.6%). The fund has highly concentrated unit holding pattern, with top 10 investors representing ~97% of the fund size at end Dec’20. The weighted average maturity (WAM) of the fund has increased to ~870 days in Dec'20 (Jun'20: ~669 days). Since Jun'20 the net assets of the Fund has manifested an increase by 24% and stood at PKR 11.23mln at end Dec'20. The investment policy of the Fund strictly prohibits investments in below A- rated avenues. Going forward, the Fund intends to invest more in GOP ijarah sukuks.
Going forward, the management intends to maintain funds allocation towards cash placements in 'AA' and above rated banks. Investments Sukuks might be made in order to diversify the portfolio holdings. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remain critical for the rating.

About the Entity
AL Habib Asset Management Limited incorporated in September 2005 as an unlisted public company, is one of the growing Asset Management and Investment Advisory Company in Pakistan. The company is licensed by the Securities and Exchange Commission of Pakistan (SECP) to carry out these services under the Non-Banking Finance Companies Regulations. The Company is a wholly owned subsidiary of Bank AL Habib Limited.
The Board of Directors comprises six members. The CEO, Mr. Kashif Rafi, has vast experience expanding over 20 years in the field of Investments and Fund Management. The Company’s diverse product slate includes 4 conventional funds and 2 shariah compliant funds.

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