Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of Atlas Sovereign Fund
Rating Type | Stability Rating | |
Current (15-Apr-22 ) |
Previous (15-Oct-21 ) |
|
Action | Maintain | Maintain |
Long Term | AA-(f) | AA-(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
Atlas Sovereign Fund (or the "Fund") reflects the Fund's medium risk profile. The objective of Atlas Sovereign Fund is to generate competitive returns by investing in Government Securities and Debt Instruments. At Dec'21, the Fund had allocated ~36% of its net assets in bank placements rated ‘AA+’ and above. While the Fund invested ~58% of its net assets in PIB's (majority in 5-year bonds). The Fund had a duration of 263 days exposed to the interest rate at the end of Dec'21. The WAM of Fund was 551 days exposing higher credit risk. The top 10 investors' concentration of the Fund, at Dec’21 was ~96% of which ~80% are related parties, keeping redemption pressure to a low level.
Going forward, company intends to increase exposure in T-Bills and the remaining assets will be invested in longer duration PIB's. 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
Atlas Asset Management Limited, incorporated in August 2002 and a part of Atlas Group, 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 a presence in manufacturing, financial, and trading sectors.
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 the Advanced Management Program from INSEAD and holds postgraduate qualifications from the University of Karachi and the Southeastern University, he also holds certification from IFMP. He has been associated with the Company for over fifteen years and held C-Suite positions for over a decade. He has a significant Board experience, where he has served as a director on the board of nineteen listed companies, including Atlas Battery Limited, Lucky Cement, Berger Paints, Mirpurkhas Sugar, amongst others along with vast experience of the mutual fund industry. The Company is currently managing five conventional and five shariah compliant funds, along with two in the VPS category. The assets under management stood at ~PKR 52 bln at end Dec'21.