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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 Faysal MTS Fund (FMTSF)

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 Faysal MTS Fund, first of its kind in the industry, primarily maintained an exposure of ~70% in the MTS market at end Dec'20. The cash balances of ~22% were majorly placed in 'AA-' and above rated banks. The offering document of the fund restrict it to invest in below 'A-' rated banks. The rating incorporates the volatile nature of the equity market in Pakistan, which impacts the NAV stability of the Fund as the major part of the investments are in MTS. The unit holding pattern of the Fund is concentrated with the top 10 investors representing ~50% of portfolio, which exposes the Fund to moderate level of redemption pressure.
Going forward, the Fund intends to take some exposure in T-Bills and increase allocation in banks, and remaining assets will be invested in the relatively limited MTS market in Pakistan. Material changes in the funds 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
Faysal Funds (Faysal Asset Management Limited) is a subsidiary of Faysal Bank Limited (FBL). FBL is holding 99.99% shares of Faysal Funds. Faysal Funds was incorporated in Pakistan under the Companies Ordinance, 1984 on August 6, 2003 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services.
The Board of Directors of the Company comprises six members, including the Chairman Mr. Salman Ahmed Usmani. He has a rich experience of over three decades in the local as well as multinational banking sector. Mr. Khaldoon bin Latif (CEO) has been associated with the capital markets for over fifteen years. Mr. Latif is a LUMS Alumni and has done a number of capital market courses with CFA association, Daiwa, J.P. Morgan and Bahrain Institute of Banking and Finance (BIBF). The Company is managing a diversified portfolio of funds, with AUM’s of ~PKR 47bln at end Dec'20.

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.