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The Pakistan Credit Rating Agency Limited
Press Release

Date
16-Apr-21

Analyst
Muhammad Zain Ayaz
zain.ayaz@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Stability Rating of Atlas Islamic Income Fund

Rating Type Stability Rating
Current
(16-Apr-21)
Previous
(16-Oct-20)
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating incorporates the Fund's strong credit quality and sound liquidity profile emanating from the Fund's policy to invest only in high quality shariah compliant instruments and maintain the cash balances with Banks rated 'A' or above. At end Dec'20, ~50% of the fund's net assets were invested with cash rated ‘A+’ and above, ~48% were invested in Corporate Sukuks rated 'AA' or above. The offering document of the Fund allows it to invest in banks rated 'AA' and above. The fund has well diversified unit holding pattern, with top 10 investors representing ~61% of the Fund size, ~20% of which are related parties. This exposes the Fund to a moderate risk of redemption pressure.
Going forward, the Fund intends to maintain its exposure in cash and will look to invest in Sukuks in order to diversify the revenue stream. 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.

About the Entity
Atlas Asset Management Limited, incorporated in August 2002, is a wholly owned subsidiary of Shirazi Investments (Pvt.) Limited – the holding company of Atlas Group. Atlas Group, founded in 1962 with the establishment of Shirazi Investments, is a diversified group having presence in manufacturing, power, financial services, and trading. It consists of four companies listed on the Stock Exchange in Pakistan and a number of non-listed companies. The Company’s seven-member Board of Directors comprises five representatives of Atlas Group including the CEO, the other two are independent directors. Mr. Iftikhar H. Shirazi is currently Chairman of Shirazi Investments (Pvt) Limited. The board has two sub-committees for providing oversight on the Company’s affairs: 1) Audit Committee and 2) Human Resource & Remuneration Committee. The Company had AUM's of ~ PKR 40.4bln at end Dec'20 (Dec'19: ~PKR 31bln).

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.