Muhammad Zain Ayaz
PACRA Maintains Stability Rating of Atlas Islamic Income Fund
|Rating Type||Stability Rating|
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.
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).