The Pakistan Credit Rating Agency Limited
28-Dec-18
Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of AKD Aggressive Income Fund
| Rating Type | Stability Rating | |
|
Current (28-Dec-18 ) |
Previous (30-Jun-18 ) |
|
| Action | Maintain | Upgrade |
| Long Term | A-(f) | A-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
AKDAIF is a dedicated fund that focuses primarily on fixed income securities and instruments. The objective of AKDAIF is to offer investors a convenient vehicle to invest in a diversified portfolio of fixed income securities/instruments that provide consistent returns with concern for the preservation of capital over the longer term.
At end-Jun 18, the fund has ~12% exposure in Government securities while cash exposure is ~38% with the majority of the exposure in ‘A-’ rated bank and rest in ‘AA+’ rated bank. The fund's exposure towards TFCs/sukuk represents 34% with TFC of the bank rated 'A-' and 'AA-'. The unit holding pattern of the fund is highly concentrated with top 10 investors (i.e. ~92%) exposing the fund to a high level of redemption pressure. The fund's current asset mix highlights a moderate credit risk profile. The assigned rating takes into account the fund's overall risk appetite which exposes the fund towards a medium level of risk.
Going forward, the fund intends to maintain its exposure with the same investment avenues. The fund will invest in debt instruments with rating not less than A-. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.
About
the Entity
AKD Investment Management Limited commenced its operations in September 2004. The company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The company is sponsored by Aqeel Karim Dhedhi Securities (Pvt) Limited (99.97% ownership). Aqeel Karim Dhedhi Securities (Pvt) Limited is majority owned by Mr. Aqeel Karim Dhedhi, Chairman of the AKD Group, a renowned figure in Pakistan's capital market.
The Board of Directors of the company comprise seven members, including the CEO Mr. Imran Motiwala, who has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The company is currently managing six open-end funds and one closed-end fund with assets under management of ~PKR 5.6 billion at end October-18.