The Pakistan Credit Rating Agency Limited
09-Mar-22
Analyst
Muhammad Junaid
muhammad.junaid@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of Alhamra Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (09-Mar-22 ) |
Previous (09-Sep-21 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Alhamra Islamic Income Fund (or the ‘Fund’) is a medium risk-profile fund. The assigned rating reflects the Fund's strong credit and interest rate risk profile emanating from its investment strategy. The fund size grew by 39% in 2HCY21. At the end-Dec'21, the Fund had placed ~56% of its assets in banks rated ‘A+’ and 'AA'. At end-Dec’21, the Fund had maintained ~21% of its net assets in government securities. The Fund had invested ~15% of AUMs in Sukuks rated 'A' and above. The WAM of Fund was 2.3 years at the end-Dec’21, which is in line with the investment policy. The average duration of the Fund was within 60 days, shielding the fund from interest rate risk. At end-Dec'21, the top ten investors' concentration stood at ~41% representing a moderate level of redemption pressure.
Going forward, the Fund will invest per its authorized investment policy, however, the allocations will be diversified appropriately. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or average duration, would affect the rating.
About
the Entity
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 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 of the largest AUMs under the SMA segment and holds a 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 the remaining ~11% of the shares. Mr. Saqib Saleem is the CEO of the Company. MCB-AH's control vests in an 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 110,012mln at end-Dec'21 (Jun'21: ~PKR 97,679mln).