Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of Pakistan Cash Management Fund
Rating Type | Stability Rating | |
Current (27-Jun-19 ) |
Previous (28-Dec-18 ) |
|
Action | Maintain | Maintain |
Long Term | AA+(f) | AA+(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The rating reflects the strength of the fund's credit and interest risk profile. The fund's good credit quality and sound liquidity profile emanates primarily from its mandate to invest in cash balances and government securities; mainly Treasury Bills. At the same time, the fund adheres to very conservative duration limit, ensuring low exposure to interest rate risk. At end Dec-18, the fund was invested as cash balances (99.4%), while the remaining assets were held as receivables (0.6%). Average duration of the fund and exposure in government securities remained in line with assigned parameters. The unit holding pattern of the fund has moderate concentration at end Dec-18, with top ten investors representing ~65% of the net assets which exposes the fund to moderate redemption pressure.
Going forward, the management of the fund intends to maintain exposure towards cash balances and govt-securities.
About
the Entity
MCB Arif Habib Savings and Investments Limited (MCBAH), incorporated in August 2000 and listed on the Pakistan Stock Exchange, is a major player in the mutual fund industry of Pakistan. In June 2011, MCB Asset Management Company was merged into Arif Habib Investments. The objective was to achieve synergies in asset management business and access a wider distribution network.
The Company's Board has seven members. Two representatives are from MCB, two representatives from Arif Habib Group, two are independent and the CEO. Mian Muhammad Mansha, Chairman MCB, serves as the Chairman of the Board. Mr. Saqib Saleem is the CEO, having work experience of over thirteen years. With overall assets under management of ~PKR47 bln at end Feb’19, the Company is currently managing fifteen open-end funds and two voluntary pension funds.