PACRA Maintains Stability Rating of Pakistan Cash Management Fund
|Rating Type||Stability Rating|
The rating reflects the fund's good credit quality, interest rate risk and sound liquidity profile emanating primarily from its mandate to invest in government securities and other low duration avenues such as bank placement's and ensuring low exposure to interest rate risk. The time to maturity of any single instrument is limited to 6 months, while the weighted average time to maturity of the portfolio must not exceed 90 days. At end-Dec'20, ~100% of fund's assets were placed with bank rated 'AAA'. Average duration of the fund remained within 45 days. Fund's unit holding pattern is highly concentrated with top 10 investors representing ~95% of the net assets; however, the highly liquid nature of fund's assets may provide relief in catering the redemption pressure.
Going forward, the fund intends to shift its asset allocation in T-Bills. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
MCB-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a public listed company, regulated by the SECP. MCB-AH holds licenses for Asset Management, Investment Advisory and Pension Fund Management. MCB-AH was incorporated in 2000 as Arif Habib Investments Limited and subsequently merged with MCB Asset Management Company in 2011, with the objective of achieving synergies in asset management business and access to a wider distribution network. Pursuant to the merger, name of the Company was changed to MCB-Arif Habib Savings and Investments Limited. MCB-AH caters to both conventional and Shariah compliant clientele and is currently managing a diverse product slate of fifteen open end funds and two voluntary pension schemes. MCB-AH is also managing one the largest AUMs under SMA segment and holds significant position in the investment advisory domain.
The major shareholders of MCB-AH are MCB Bank Limited ~51%, Arif Habib Corporation Limited ~30% and Adamjee Insurance Company Limited ~8%. The general public holds remaining ~11% of the shares. MCB-AH's control vests in eight member board of directors, including the CEO. There are four non-executive directors, while three directors are independent. The AUMs (CIS & VPS) of MCB-AH increased to ~PKR 82,721mln at end Dec'20 (Jun'20: ~PKR 66,210mln).