The Pakistan Credit Rating Agency Limited
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Muhammad Zain Ayaz

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PACRA Maintains Stability Rating of Atlas Sovereign Fund

Rating Type Stability Rating
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating reflects the Fund's strong credit profile emanating from its investment objective to invest in Government Securities and debt instruments. At end Dec'20, ~40% of Fund's assets are placed in ‘AA+’ rated and above banks while ~53% in PIB's. The offering document of the Fund restrict investments below 'A' rated banks. The Fund had a duration of 398 days. The Fund is highly concentrated with top 10 investors representing ~91% of total Fund size, ~65% of which are related parties, which reduces the redemption pressure.
Going forward, company intends to increase exposure in T-Bills and the remaining assets will be invested in longer duration PIB's. 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.