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The Pakistan Credit Rating Agency Limited
Press Release

Date
09-Sep-21

Analyst
Muhammad Junaid
muhammad.junaid@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 Alhamra Daily Dividend Fund

Rating Type Stability Rating
Current
(09-Sep-21)
Previous
(09-Mar-21)
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

Alhamra Daily Dividend Fund (or the “Fund) is a medium risk-profile fund. The assigned rating reflects the adequate strength of the Fund's credit and interest rate risk profile, considerable holding of cash and bank balances reinforce the liquidity profile. At the end-Jun'21, ~94% of the Fund's assets were mainly placed with banks rated 'AAA'. About 6% of Funds were invested in commercial papers rated 'AA'. The duration of the Fund was 7 days as of end-Jun’21 and the weighted average maturity of the Fund was also low at 7 days. The unit holding pattern of the Fund is moderately concentrated with the top ten investors representing ~43% of the Fund's assets. The benchmark of the Fund is six months of average deposit rates of three 'A' rated Scheduled Islamic Banks or Islamic window of Conventional Banks. The Fund outperformed the benchmark by 288 basis points in FY21.
Going forward, the Fund may maintain its asset allocation towards banks depending on economic and market expectations and the Fund will diversify the allocation among different shariah compliant instruments to address the concentration risk. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
MCB-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a public listed company, regulated by the SECP. MCB-AH holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCB-AH was incorporated in 2000 as Arif Habib Investments Limited and subsequently merged with MCB Asset Management Company in 2011, to achieve synergies in asset management business and access to a wider distribution network. Pursuant to the merger, the name of the Company was changed to MCB-Arif Habib Savings and Investments Limited. MCB-AH caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of fifteen open-end funds and two voluntary pension schemes. MCB-AH is also managing one of the largest AUMs under the SMA segment and holds a significant position in the investment advisory domain.
The major shareholders of MCB-AH are MCB Bank Limited ~51%, Arif Habib Corporation Limited ~30%, and Adamjee Insurance Company Limited ~8%. The general public holds the remaining ~11% of the shares. MCB-AH's control vests in an eight-member board of directors, including the CEO. There are four non-executive directors, while three directors are independent. The AUMs (CIS & VPS) of MCB-AH increased to ~PKR 97,679mln at end-Jun'21 (Dec'20: ~PKR.82,721mln).

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.