The Pakistan Credit Rating Agency Limited
17-Apr-19
Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
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PACRA Maintains Stability Rating of Atlas Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (17-Apr-19 ) |
Previous (11-Dec-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The objective of the fund is to seek preservation of capital and reasonable rate of return from a broadly diversified portfolio of long, medium and short-term, high-quality Islamic income instruments.
The rating incorporates the fund's moderate credit quality and sound liquidity profile emanating from the fund's strategy to invest in good quality shariah compliant instruments. At end Dec-18, ~83% of the fund's net assets were invested as cash with banks rated 'A and above', whilst ~13% were invested in sukuks rated 'AA'. The fund has a well-diversified unit holding pattern, with top 10 investors representing ~63% of the fund size which exposes the fund to moderate level of redemption pressure.
Going forward, the fund intends to maintain its exposure in cash and debt instruments. 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
Atlas Asset Management Limited, incorporated in August 2002 and a part of Atlas Group (AG), 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 presence in manufacturing, financial, and trading sectors. With an AUM base of ~PKR 29bln at Dec-18, AAML is currently managing eight open-end funds along with conventional and Islamic pension funds.
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 Programme from INSEAD and holds postgraduate qualifications from University of Karachi & Southeastern University and holds certification from IFMP. He has been associated with the company for over twelve years and held C-Suite positions for over a decade. He has vast experience of the mutual fund industry and was non- executive director on the board of nineteen listed companies. AAML’s existing team is well qualified with related experience and has demonstrated stability during the year.