PACRA Maintains Stability Rating of Pak Oman Government Securities Fund
|Rating Type||Stability Rating|
The rating reflects the fund's strong credit quality and a sound liquidity profile emanating from the fund's policy to invest 70% of asset in a mix of short-term and long-term government securities. At end Dec'19, ~16% of the fund's exposure was in Term Finance Certificates (TFCs) and ~83% was maintained as Cash. The unit holding pattern of the fund is concentrated with top ten investors representing 100% of the fund's assets, of which ~99% are own investments which reduces redemption pressure.
Going forward, the rating remains dependent on maintaining at least 70% allocation towards government securities with portfolio duration not exceeding 2 years. The fund manager intends to increase exposure to long-term Government securities in order to increase the interest rate sensitivity of the fund. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
Pak Oman Asset Management Company Limited was incorporated on July 28, 2006 as a public unlisted company. It is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The Company is a majority owned subsidiary of Pak Oman Investment Company Limited (97%). The remaining shareholders include Oman International Development Company (1.2%), Bank Muscat (0.6%) and National Logistic Cell (1.2%).
The Company’s Board of Directors comprises six members including the managing director of Pak Oman Investment Company, Mr. Bahauddin Khan. The board’s chairman H.E. Yahya Bin Said Bin Abdullah Al-Jabri is the Minister of the Special Economic Zone Authority at A’Duqum, Sultanate of Oman. The Company’s diverse product slate includes eight open-end funds, six conventional and two shariah compliant funds, with AUM’s of ~PKR 4.3bln as at Dec'19.