Muhammad Zain Ayaz
PACRA Maintains Stability Rating of Pak Oman Advantage Islamic Income Fund
|Rating Type||Stability Rating|
The rating incorporates Pak Oman Advantage Islamic Income Fund's (or the "Fund") moderate risk level. The ratings also incorporates the Fund's objective to provide competitive returns and long term capital growth by investing in diversified portfolio of Shariah Compliant Securities. The asset allocation comprises of ~76% as cash placements in banks having minimum rating of 'A-' and ~22.75% invested in Sukuks having minimum credit rating of 'AA-'. The current investment strategy is in line with the policy, while the policy restricts the investments below 'A-' rated avenues . The average duration of the fund was 151 days at end Jun'21. The unit holding pattern of the fund is highly concentrated where ~98.7% is represented by top 10 investors. However, ~55% of the fund size are investments made by the Management Company itself and related parties which reduces the risk of redemption pressure. During 2HFY21, the Fund's performance remained above benchmark and industry averages.
Going forward, the management of the fund intends to maintain its exposure in debt instruments which may impact the duration. Meanwhile, the fund plans to remain invested in sound credit quality banks. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
Pak Oman Asset Management Company Limited was incorporated on July 28, 2006 as a public unlisted company. It is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a majority owned subsidiary of Pak Oman Investment Company Limited (98%). The remaining shareholders include Oman International Development Company (0.84%), Bank Muscat (0.43%) and National Logistic Cell (0.84%).
The company’s Board of Directors comprise six members including the managing director of Pak Oman Investment Company, Mr. Bahauddin Khan. The board’s chairman H.H Juland Jaifer Salim Al-Said has over 15 years of experience at the Oman Investment Authority (OIA) (Previously known as State General Reserve Fund). The company’s diverse product slate includes eight open-end funds as at June'21 belonging to all major categories.