PACRA Maintains Stability Rating of MCB Pakistan Sovereign Fund
|Rating Type||Stability Rating|
MCB Pakistan Sovereign Fund (or the ‘Fund’) is a medium risk-profile fund. The assigned rating reflects the strong strength of the Fund's liquidity and credit risk profile and moderate strength of the interest rate risk profile. The Investment process adapts a preemptive risk management framework to dilute risk levels and volatility during the portfolio construction process. The Fund’s weighted average maturity was 2.2 years as of end-Jun’21, which is in line with investment policy. At end-Jun'21, ~57% of Fund's assets were invested in banks mainly rated ‘AAA’. The Fund had invested remaining (~43%) funds in government securities. The unit holding pattern of the Fund is moderately concentrated with top ten investors representing ~47% of the Fund's assets, which exposes the Fund to a moderate level of redemption pressure.
Going forward, the Fund intends to maintain its asset allocation in government securities and banks, however, the allocations may be changed based on market circumstances. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
MCB-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a public listed company, regulated by the SECP. MCB-AH holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCB-AH was incorporated in 2000 as Arif Habib Investments Limited and subsequently merged with MCB Asset Management Company in 2011, to achieve synergies in asset management business and access to a wider distribution network. Pursuant to the merger, the name of the Company was changed to MCB-Arif Habib Savings and Investments Limited. MCB-AH caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of fifteen open-end funds and two voluntary pension schemes. MCB-AH is also managing one of the largest AUMs under the SMA segment and holds a significant position in the investment advisory domain.
The major shareholders of MCB-AH are MCB Bank Limited ~51%, Arif Habib Corporation Limited ~30%, and Adamjee Insurance Company Limited ~8%. The general public holds the remaining ~11% of the shares. MCB-AH's control vests in an eight-member board of directors, including the CEO. There are four non-executive directors, while three directors are independent. The AUMs (CIS & VPS) of MCB-AH increased to ~PKR 97,679mln at end-Jun'21 (Dec'20: ~PKR.82,721mln).