The Pakistan Credit Rating Agency Limited
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Muhammad Zain Ayaz

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PACRA Maintains Stability Rating of Askari High Yield Scheme

Rating Type Stability Rating
(17-Aug-21 )
(17-Feb-21 )
Action Maintain Maintain
Long Term A(f) A(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating reflects Askari High Yield Scheme Fund's (or the "Fund") moderate exposure to interest rate volatility, credit and liquidity profile and moderate diversification across assets. At end Jun-21, fund's exposure in PIBs was ~22%, ~19% in T-Bills while ~43% in bank deposits having rating 'A' and above. The current investment strategy is in line with the investment policy, while the policy requires the Fund to invest up to 90% in government securities and in banks having minimum rating of 'A-'. The unit holding pattern of the fund shows top ten investors concentration represents ~75.4% of the fund's assets out of which 29% belongs to related parties, reducing the redemption pressure. The quarterly average duration of the Fund was 324 days. During 2HFY21, the Fund was not able to beat its benchmark while managed to beat the industry averages. While, net asset under management decreased by 30% times since Dec'20.
Going forward, the fund intends to change the funds exposure and look to reduce the allocations in TFC's and long term Government Securities. The main aim of this would be reduce the interest rate risk, volatility of returns and duration of the fund. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remain critical for the rating.

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 (98%). The remaining shareholders include Oman International Development Company (0.84%), Bank Muscat (0.43%) and National Logistic Cell (0.84%).
The company’s Board of Directors comprise six members including the managing director of Pak Oman Investment Company, Mr. Bahauddin Khan. The board’s chairman H.H Juland Jaifer 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 eight open-end funds as at June'21 belonging to all major categories.

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.