The Pakistan Credit Rating Agency Limited
Press Release


Hassaan Ahmad

Applicable Criteria

Related Research

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 "Pak Qatar Khalis Bachat Plan" under Pak Qatar Islamic Income Fund

Rating Type Stability Rating
(31-May-24 )
(01-Dec-23 )
Action Maintain Maintain
Long Term A(f) A(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

Pak Qatar Islamic Income Fund (or the "Fund") is an open-ended shariah compliant Income fund. The Fund falls under a medium risk profile. The objective of the Fund is to maximize the investor's return by investing in shariah-compliant authorized investable avenues. The under mentioned plans are initially offered under the umbrella of the Fund i) Pak-Qatar Income Plan ii) Pak-Qatar Monthly Income Plan and iii) Pak-Qatar Khalis Bachat Plan.
Pak Qatar Khalis Bachat Plan (PQKBP or the 'Plan') is focused on Takaful benefits who prefer yearly dividend under a stable Income category. The objective is to generate superior, long-term, risk-adjusted returns in accordance with Shariah practices The term of the Plan is perpetual. As per the investment policy of the Plan, the Plan can't invest in below single A- rated avenues. As for as asset allocation is concerned, the Plan can invest up to 100% in shariah-compliant Govt. securities and cash at bank. The Plan may change the dividend frequency at its own discretion for the benefit of the unit holder with prior intimation.
The credit quality of the Fund was ~35% in AAA rated avenues, ~21% in A rated avenues, ~17% in A+ rated avenues, ~10% in AA+ rated avenues, ~9% in A- rated avenues, ~3% in AA- rated avenues and ~2% in AA rated avenues at the end of Mar’24. At the end of Mar’24, the Fund had allocated 68% in GOP Ijara sukuk or commercial papers, ~28% in banks in the form of deposits and placements and the remaining was invested in others. The duration of the Fund stood at 64 days at the end of Mar'24, exposing the Fund to interest rate risk. The WAM of the Fund stood at 802 days at the end of Mar'24, exposing the Fund to high credit risk. As of Mar'24, ~76.85% of the Fund's assets were held by the top 10 investors which includes related parties, diversified with granular participants, which act as major cushion in case of any aggressive redemption pressure by the remaining non-related party. Besides overall investment remains marketable with enough liquidity to meet any redemption risks.
Going forward, any material changes in the investment policy or the devised rating criteria for the assigned rating would have an impact on the ratings.

About the Entity
Pak Qatar Asset Management Limited, established in 2021, is licensed by the SECP to carry out asset management and investment advisory business. The major shareholder of the Company is the holding company Pak Qatar Investment (PVT) Ltd which holds 52% of stake and remaining shareholder include FWU AG (20%), and Pak Qatar Family Takaful (5%). However, two board directors Mr. Owais Ansari and Mr. Kamran Saleem also hold 14% and 7%. The Company's board is composed of five members, with representation of two members from Pak Qatar Investment Limited, one representative of Pak Qatar Family Takaful Limited, one representative of FWU AG and one independent director. The CEO, Mr. Farhan Shaukat, FCA, has been associated with the group for over a decade heading Treasury function of the group. The AUMs of the Company stood at PKR 23.4bln at the end Mar’24.

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.