The Pakistan Credit Rating Agency Limited
22-Apr-25
Analyst
Usama Ali
usama.ali@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of AL Habib Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (22-Apr-25 ) |
Previous (30-Aug-24 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
AL Habib Islamic Income Fund ('AHIIF' or the 'Fund') is a low risk profile Fund. The objective of AHIIF is to provide competitive risk-adjusted returns to its investors by investing in a diversified portfolio of long, medium, and short-term Shariah Compliant debt instruments while taking into account liquidity considerations. The assigned rating reflects the Fund's moderate credit risk profile emanating from the Fund's investment policy to invest in avenues with sound liquidity. In its asset allocation, the Fund had invested ~53.46% in GoP Ijarah Sukuk, ~40.33% in Cash, ~3.39% in Corporate Sukuk, and ~2.82% in others at end-December 2024. Regarding credit quality exposure, the Fund had allocated ~56% to AAA-rated avenues, ~37.55% to AA-rated avenues, and ~3% to other rated avenues as of December 2024. The duration of the Fund stood at 174 days at end-December 2024, limiting exposure to interest rate risk, while the WAM stood at 679 days, indicating very high credit risk exposure. However, this credit risk is managed through the Fund's predominant investments in government securities. The unit holding pattern shows high concentration risk, with the top 10 investors representing ~80.15% of net assets, creating very high redemption risk that is mitigated through related party investments.
Going forward, any material changes in the investment policy or devised rating criteria for the assigned rating would have an impact on the ratings.
About
the Entity
AL Habib Asset Management Limited ('AHAML') incorporated in September 2005 as an unlisted public company, is the fastest-growing Asset Management and Investment Advisory Company in Pakistan. The company is licensed by the Securities and Exchange Commission of Pakistan (SECP) to carry out these services under the Non-Banking Finance Companies Regulations. The Company is a wholly-owned subsidiary of Bank AL Habib Limited. The Board of Directors comprises six members. The CEO, Mr. Kashif Rafi, has vast experience expanding over 22 years in the field of Investments and Fund Management. The Company’s diverse product slate includes 7 conventional funds and 5 Shariah-compliant in open-ended schemes. As of Dec'24, the total AUMs of AHAML stood at PKR 300bln.