The Pakistan Credit Rating Agency Limited
06-May-20
Analyst
Afnan Iqbal
afnan.iqbal_old@pacra.com_old
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of MCB Pakistan Sovereign Fund
| Rating Type | Stability Rating | |
|
Current (06-May-20 ) |
Previous (24-Dec-19 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating reflects the strength of the fund's credit and interest rate risk profile. At end Dec-19, 93% of fund's assets were invested in PIBs (31%) and T-Bills (62%). The unit holding pattern of the fund is highly concentrated with top ten investors representing ~59% of the fund's assets, which exposes the fund to higher level of redemption pressure.
Going forward, the fund intends to maintain its asset allocation in government securities. 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 Savings and Investments Limited ("The Company" or "MCBAH") a subsidiary of MCB Bank Limited, was incorporated in August 2000 and is listed on the Pakistan Stock Exchange. MCBAH is a major player in the mutual fund industry of Pakistan. In June 2011, MCBAH was merged into Arif Habib Corporation Limited, with the objective of achieving synergies in asset management business and access to a wider distribution network.
The company's eight-member board comprise the CEO and chairman. There are four non-executive directors, three independent directors and one executive director. The Chairman, Mr. Haroun Rashid replaced Mr. Mian Muhammad Mansha in Feb-20. Mr. Rashid has served at senior positions of several prestigious organisations. Mr. Saqib Saleem is the CEO, possessing relevant experience of more than a decade. With overall assets under management of ~PKR 58 bln at end Dec-19, the Company is currently managing fifteen open-end funds and two voluntary pension schemes. The assets under management of separately managed accounts (SMA) stood at~PKR 40 bln at end Dec-19.