PACRA Maintains Stability Rating of Pak Oman Advantage Islamic Income Fund

The Pak Oman Advantage Islamic Income Fund ('POAIIF' or the 'Fund') maintains a moderate risk profile. The primary objective is to provide investor(s) with competitive current income and long term capital growth primarily by investing in a diversified portfolio of shariah compliant securities available for investment outside Pakistan subject to applicable laws. The assigned rating reflects the Fund's moderate credit risk profile emanating from the Fund's sound investment policy to invest in avenues with sound liquidity. As of Dec'24, the Fund's AUM size stood at ~PKR 132mln. In terms of asset class, ~50% was allocated to bank placements, ~22% in corporate sukuks, ~20% in GOP Ijara Sukuks. In perspective of credit quality, the Fund had invested ~42% in A- rated avenues, ~22% in AA+, ~20% in Govt Securities/AAA, whereas the remaining was invested in others. As of Dec'24, the Fund's duration stood at 219 days, suggesting an elevated exposure to interest rate risk. Meanwhile, the Fund’s weighted average maturity (WAM) was recorded at 416 days, indicating a relatively higher credit risk. Nonetheless, credit risk remains manageable given the Fund’s significant allocation towards government securities. The unit holding pattern of the Fund is relatively concentrated, with approximately 93.4% held by the top 10 investors, which could potentially result in heightened redemption pressure. This risk, however, is mitigated through the maintenance of adequate liquidity buffers.
Going forward, any material changes in the investment policy and/or compliance with the rating criteria for the assigned rating would have an impact on the ratings.

About the Entity
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 (99.46%). The remaining shareholders include Oman International Development and Investment Company, SAOG (0.54%). The company’s Board of Directors comprises six members including the managing director of Pak Oman Investment Company Limited, Mr. Nauman Ansari. The board’s chairman H.H. Sayyid Juland Jaifar 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 nine open end funds as of Dec'24 belonging to all major categories. The AUMs of the Company stood at ~PKR 2,353mln at the end of Dec'24.