The Pakistan Credit Rating Agency Limited
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Muhammad Zain Ayaz

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PACRA Maintains Stability Rating of Alfalah Islamic Rozana Amdani Fund

Rating Type Stability Rating
(11-Nov-21 )
(19-May-21 )
Action Maintain Initial
Long Term AA(f) AA(f)
Short Term - -
Outlook Stable
Rating Watch - -

Alfalah Islamic Rozana Amdani Fund (or the "Fund") is an open ended shariah compliant market fund, managed by Alfalah GHP Investment Management Limited. The rating reflects the Fund's low credit risk profile emanating from the Fund's investment policy to invest in strong credit quality investment avenues with sound liquidity. On Jun'21, the Fund had allocated ~52% of Fund's assets to bank placements rated ‘AA’ and above’, ~13% in commercial papers, and ~20% as bai-muajjal agreement with bank rated ‘AA’ and above. The investment policy of the Fund restricts investment in below 'AA' rated avenues. The duration of the Fund is 31 days, at Jun'21, which bodes well with the rating. The rating also takes comfort from the fact that quarterly weighted average duration of the Fund must be capped at 60 days which will support the Fund to maintain low level of price risk and strong liquidity profile. Fund's unit holding pattern is highly concentrated with top 10 investors representing ~87% of the net assets, of which ~7% are related parties. This exhibits high redemption pressure.
Going forward, the rating of the Fund will remain dependent upon maintaining its liquidity, credit quality and duration benchmark in line with its investment policy and PACRA rating criteria.

About the Entity
Alfalah GHP Investment Management Limited was incorporated on October 18, 2004 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to manage open-ended mutual funds and offer investment advisory services. The Company was established as joint venture Non-Banking Finance Company by Bank Alfalah Limited and GHP Arbitrium. The Company provides a wide range of mutual funds and pension funds both in conventional and Shariah compliant category. The Company also provides investment advisory services to the Company’s board of directors comprises eight members including the Chairman and the Chief Executive Officer. The board is dominated by representatives of MAB Investments and Bank Alfalah Limited. The board has two independent and five non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 55bln at end Jun’21 and are spread across fifteen open-end mutual funds and two voluntary pension schemes.

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.