The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of Faysal MTS Fund (FMTSF)

Rating Type Stability Rating
(18-Apr-22 )
(18-Oct-21 )
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The Faysal MTS Fund, first of its kind in the industry, provide returns primarily through investment to MTS market. At end Dec'21, the Fund was 37% invested in bank deposits with bank having rating AAA and AA-. While ~12% of the assets were invested in T-bills. The rest of the investment ~50% was made in MTS market. The overall credit quality was remained strong during CY21. The Fund remained compliant with its Investment Policy. The rating incorporates the volatile nature of the equity market in Pakistan, which impacts the NAV stability of the Fund as the major part of the investments are in MTS. The duration of the Fund remained 31 days, at Dec'21. The unit holding pattern of the Fund is concentrated with the top 10 investors representing ~52% of the portfolio, which exposes the Fund to a moderate level of redemption pressure.
Going forward, the Fund intends to take exposure in MTS and cash and some portion would remains in T-Bills. Material changes in the funds 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
Faysal Funds (Faysal Asset Management Limited) is a subsidiary of Faysal Bank Limited (FBL). FBL is holding 99.99% shares of Faysal Funds. Faysal Funds was incorporated in Pakistan under the Companies Ordinance, 1984 on August 6, 2003 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services.
The Board of Directors of the Company comprises six members, including the Chairman Mr. Salman Ahmed Usmani. He has a rich experience of over three decades in the local as well as multinational banking sector. Mr. Khaldoon bin Latif (CEO) has been associated with the capital markets for over fifteen years. Mr. Latif is a LUMS Alumni and has done a number of capital market courses with CFA association, Daiwa, J.P. Morgan and Bahrain Institute of Banking and Finance (BIBF). The Company is managing a diversified portfolio of funds, with AUM’s of ~PKR 76bln at end Dec'21.

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.