The Pakistan Credit Rating Agency Limited
Press Release


Madiha Sohail

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PACRA Maintains Stability Rating of AL Habib Islamic Income Fund (formerly First Habib Islamic Income Fund)

Rating Type Stability Rating
(04-Mar-22 )
(04-Sep-21 )
Action Maintain Maintain
Long Term AA(f) AA(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating of AL Habib Islamic Income Fund (formerly First Habib Islamic Income Fund (or the "Fund")) reflects the fund's moderate risk profile. The Fund had allocated ~61% of fund's assets as bank deposits having rating ‘A’ and above, while ~29% were placed in Sukuks rated 'A+' and above. As per the investment policy, the Fund can invest up to 100% of its assets as Cash in Bank Accounts having rating of ‘A’ and above. The Fund has highly concentrated unit holding pattern, with top 10 investors representing ~89% of the fund size at end Dec’21. The weighted average maturity (WAM) of the Fund is ~683 days in Dec'21 (Jun'21: ~814 days) having longer WAM is making the Fund vulnerable to credit risk. The duration of the fund is 25 days, limiting the exposure to interest rate risk. Since Jun'21 the net assets of the Fund has manifested decrease by 54% and stood at PKR 6.51mln at end Dec'21.
Going forward, the management intends to increase it's investments in AAA rated avenues around 50% and 25% in AA rated avenues. Asset credit quality and duration would remain imperative for 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 5 conventional funds and 4 shariah compliant funds.

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.