The Pakistan Credit Rating Agency Limited
29-Dec-21
Analyst
Muhammad Zain Ayaz
zain.ayaz@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Assigns Initial Stability Rating to Pak Oman Daily Dividend Fund
| Rating Type | Stability Rating | |
|
Current (29-Dec-21 ) |
||
| Action | Initial | |
| Long Term | AA(f) | |
| Short Term | - | |
| Outlook | Stable | |
| Rating Watch | - | |
Pak Oman Daily Dividend Fund (or the "fund") is an open ended shariah compliant market fund, managed by Pak Oman Asset Management Company Limited. In order to strengthen its relative position in Islamic money market category, Pak Oman Asset Management Company Limited has launched the fund in Dec'21, it has achieved a size of PKR ~200mln. The rating reflects the fund's low credit risk profile emanating from the fund's investment policy to invest in strong credit quality investment avenues with sound liquidity. On Dec'21, fund's assets were ~99% invested with single bank rated 'AA'. Further, the investment policy of the Fund strictly prohibits investment in below AA rated avenues, limiting the credit risk. The current weighted average maturity (WAM) of the fund is 1 day. The Fund plans to cap its WAM below 60 days. Whereas the unit holding pattern is currently concentrated with top 10 investors representing 100% of the total fund size. The offering document of the fund, restricts the fund to liquid and low risk profile avenues, which reflects redemption risk as well. Any material breach of investment policy is considered negative.
Going forward, the fund will continue its current allocation strategy, the change in strategy is completely dependent on the growth in Fund size. The strategy represents high liquidity and low risk profile, which bodes well to the rating.
About
the Entity
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 (98%). The remaining shareholders include Oman International Development Company (0.84%), Bank Muscat (0.43%) and National Logistic Cell (0.84%).
The company’s Board of Directors comprise six members including the managing director of Pak Oman Investment Company, Mr. Bahauddin Khan. The board’s chairman H.H Juland Jaifer Salim Al-Said has over 15 years of experience at the Oman Investment Authority (OIA) (Previously known as State General Reserve Fund). The company’s diverse product slate includes nine open-end funds as at Sep'21 belonging to all major categories.