PACRA Maintains Stability Rating of First Habib Income Fund
|Rating Type||Stability Rating|
The rating reflects the funds strong credit risk profile. At end Dec’19, majority of the fund's assets were invested as cash (~78%) and the rest was invested in TFCs and Sukuks (~9% each). This exposure is with banks rated 'AA+' and above. The fund has high concentrated unit holding pattern, with top 10 investors representing ~83% of the fund size at end Dec’19.
Going forward, the management intends to shift funds allocation towards cash placements in 'AAA' rated Banks, while the remaining assets would be invested in government-guaranteed investments. This action will increase the interest rate sensitivity of the fund. 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.
Habib Asset Management Limited incorporated in September 2005 as an unlisted public limited company. The Company is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. Bank Al Habib is in the process of acquiring 100% stake in the Company. The Company aims to create synergies from the acquisitions and hopes to increase the market share after using the Banks network to target prospective clients.
HAML’s BoD consists of six members, including the CEO. The Chairman of the Board, Mr. Ali Raza D. Habib has extensive experience in the Capital Markets of Pakistan. The Company is currently managing six open-end funds with AUM’s of ~PKR 6.96bln at end Dec’19.