The Pakistan Credit Rating Agency Limited
17-Apr-19
Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of Atlas Income Fund
| Rating Type | Stability Rating | |
|
Current (17-Apr-19 ) |
Previous (11-Dec-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The objective of the fund is to earn a competitive return while preserving capital by investing in good quality corporate debt instruments, bank deposits and government securities.
The rating reflects the fund's medium exposure to interest rate volatility, strong credit profile, and diversification across assets. At the end of Dec-18, fund's exposure was ~64% in cash, ~28% in TFCs, ~4% in MTS while ~3% in T-bills. The unit holding pattern of the fund is concentrated with top 10 investors representing ~89% of the fund's assets (of which almost all of the investments are group's investments) which exposes the fund to a very low level of redemption pressure.
Going forward, the fund intends to increase its exposure toward short-term and long-term government securities. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.
About
the Entity
Atlas Asset Management Limited, incorporated in August 2002 and a part of Atlas Group (AG), is a wholly owned (100%) subsidiary of Shirazi Investments (Pvt.) Limited - the holding company of the Group. Atlas Group, established in 1962, is one of the well-known business groups of the country with presence in manufacturing, financial, and trading sectors. With an AUM base of ~PKR 29bln at Dec-18, AAML is currently managing eight open-end funds along with conventional and Islamic pension funds.
AAML's seven-member board of directors comprises four representatives of Atlas Group, two independent directors and the CEO. The CEO of the company, Mr. Muhammad Abdul Samad, has completed Advanced Management Programme from INSEAD and holds postgraduate qualifications from University of Karachi & Southeastern University and holds certification from IFMP. He has been associated with the company for over twelve years and held C-Suite positions for over a decade. He has vast experience of the mutual fund industry and was non- executive director on the board of nineteen listed companies. AAML’s existing team is well qualified with related experience and has demonstrated stability during the year.