The Pakistan Credit Rating Agency Limited
08-Apr-22
Analyst
Muhammad Zain Ayaz
zain.ayaz@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of AWT Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (08-Apr-22 ) |
Previous (08-Oct-21 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating of AWT Islamic Income Fund (or the "Fund") reflects the Fund's adequate credit risk profile emanating from its asset allocation. The Fund exposure in cash at bank was 94.92% and exposure in Sukuks was 3.79% of net assets at end Dec'21. Credit quality of the Fund is adequate, ~94% of the Fund's asset invested as cash placements in banks having rating 'A' and above, while ~6% invested in sukuks and others. The offering document of the Fund allows it to invest in banks rated 'A' and above. The duration of the Fund remained 24 days, at Dec'21 which is limiting the exposure to interest rate risk. While the WAM of the Fund was 25 days at end Dec'21 which is reducing the credit risk to Fund. The unit holding pattern of the Fund is concentrated with the top 10 investors representing ~77% of the portfolio, out of which ~40% consisted of related parties which have kept the redemption pressure to a moderate level.
Going forward, the Fund intends to maintain it's exposure with Banks rated 'A' and above. 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
AWT Investments Limited is a public unlisted company, incorporated in 2011. It is a Non-Banking Finance Company, licensed by the Securities and Exchange Commission of Pakistan to manage open and closed-end funds and Investment Advisory Services. The Company is a wholly-owned subsidiary of Army Welfare Trust.
The Board of Directors of the Company comprises five members. The CEO of the Company Mr. Salman Haider has recently resigned. Mr. Sajjad Anwar has joined as CEO of the Company in Mar'22. Mr. Anwar is CFA charter holder and has over 21 years of experience that involves Equity Research, Portfolio Management, Investment Advisory, Risk Management, and Finance & Accounts. For the last 15 years, he has been working in the Fund Management Industry. Before becoming CEO at AWTIL, he was performing the role of Chief Investment Officer at NBP Funds.